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Bad News Waiting For 780 Woonoscket Retirees, Beneficiaries At Monday Meeting

Suspended COLAs, switch to Medicare for retirees needed as part of city's 5-year plan to solvency.

 

"The overall financial condition of this city is severe," said Finance Director Thomas Bruce, and the solution involves bad news for Woonsocket's 780 retirees and beneficiaries as well as its taxpayers.

On Monday, 3 p.m. at Woonsocket High School, the city and the Woonsocket Budget Commission will host an informational meeting to lay out the city's situation and retiree/beneficiaries' anticipated role in the solution.

Among the pieces of bad news people can expect to hear, Bruce said, is the elimination of the 3 percent Cost of Living Adjustment (COLA) for retirees. 

According to a city letter sent to retirees and beneficiaries (see attached .pdf), Woonsocket's pension plan is critically under-funded at 56.7 percent ($58 million of a $98 million total obligation) as of July 1, 2012, under the 60 percent threshold set by the state, making suspension of the COLA a necessary part of the city's deficit reduction plan.

In addition, the city's Other Post-Employment Benefits (OPEB) - or healthcare obligation - stands at $210 million, which the city has made minimal contributions to, must also be addressed. Unless the city begins making signifcant contributions to the Annual Required Contribution (ARC), "...it will not be able to make payment to current or future retirees for some or any of the promised health benefits in the future," the letter reads. 

To address the OPEB shortfall, the city will require retirees over 65 who qualify to switch from the city's health plan to Medicare this year, and the city needs eligible retirees to notify them of their Medicare status - either a Medicare card or a denial letter - by March 31. 

Retirees who are not Medicare-eligible will have to pay a 20 percent co-pay and a $1,000 family deductible or $500 individual deductible. 

Bruce said that while the hardships are dire, so is the sacrifice being asked of taxpayers. Also, he said, if the city is not able to make this and the rest of the plan work, a receiver will likely be appointed for the city.

For retirees who believe they welcome that development, Bruce points to the case of Central Falls, where a reciever cut base pay benefits nearly in half, from $300 to $170. 

Bruce said the meeting should last two hours, and will involve input from pension system actuaries, members of the Woonsocket Finance Department, Budget Commission Chairman Bill Sequino, and city labor lawyer Dan Kinder.

During the meeting, officials will present the city's situation, the plan to fix the deficit and unfunded pensions/benefits, and three pieces of information:

1) Next year's COLA

2) Each year without the COLA

3) Payments beneficiaries would receive if Woonsocket followed Central Falls' lead in recievership. 

The second hour of the meeting will be devoted to a question and answer session. "The retirees deserve all the information that's out there," said Bruce.  

ANTHONY RYAN February 25, 2013 at 09:16 PM
Once again the President and Democrats are playing games with us threatening to cut 40 million in aid to RI. AND AIF THAT HAPPENS THEY WILL ONCE AGAIN TAKE IT AWAY FROM THE WORKING MAN AND RAISE TAXES. FIRST THEY SHOULD CUT SOCIAL PROGRAM SPENDING AND NEXT THE FEDERAL GOVERNMENT SHOULD CUT WASTEFUL SPENDING AND PAY THE STATES AND CITIES THE MONEY THEY PROMISED SO THEY CAN MEET THE OBLIGATIONS PROMISED. AS I SAID BEFORE WE NEED TO VOTE ABSOLUTELY EVERYONE OUT OF OFFICE. THEY ALWAYS HURT THE WORKING MAN AND TAX PAYERS AND PROTECT THE PEOPLE WHO ARE DRAGGING SOCIETY DOWNNNNNNNNNNNNNNNNN. PEOPLE ON WELFARE STILL GET COLA'S AND FREE HEALTHCARE WITH NO DEDUCTIBLE AND IF THEY GO ON MEDICARE LIKE THEY EXPECT CITY EMPLOYEES THE STATE YES THE STATE PICKS UP THE COPAYS AND DEDUCTIBLE AND THEN THE STATE CHARGES THE WORKING MAN AND TAX PAYER FOR THESE FREEBEES. ONLY IN AMERICA CAN SOMEONE ON WELFARE WHO PAYS NOTHING GET MORE FROM THE GOVERNMENT THAN THE PEOPLE THAT ACTUALLY WORK FOR A LIVING..........
Novan for Life February 26, 2013 at 11:57 AM
anthony the democrats didn't create the sequester the GOP put that in to cut spending. As far as the rest of your comment it's just in my view someone (complaining that life isn't fair) well get over it thats reality
ANTHONY RYAN February 26, 2013 at 09:21 PM
Novan for life check your facts your boy obama asked for and got sequester he also said he would veto any changes. I never said life is fair and unlike many I do and expect to pay my way. My problem with the government is they take from the workers and taxpayers and give give give to social programs. NOVAN DO YOU PAY FOR YOUR CELL PHONE OR DOES OBAMA DO YOU GET DIRT CHEAP RENT WITH HEAT AND ELECTRIC FREE, DO U SIT HOME AND COLLECT EVERY IMAGINABLE BENEFIT FROM THE GOVERNMENT WHIILE OTHERS WORK AND PAY. I CAN GO ON AND ON I JUST CANT SEE TAKING BENEFITS FROM THE WORKING MAN AND THEN HANDING IT OVER TO PEOPLE HERE ILLEGALLY OR WHO NEVER WORKED AND EXPECT FREE STUFF FROM THE WORKERS. IT'S TIME WE RISE UP AND TELL OUR POLITICIANS ENOUGH IS ENOUGH. IF YOU WANT TO DRINK OBAMAS KOOL AID GO AHEAD WHEN GAS AND HEALTHCARE KEEP GOING UP AND THE NON WORKING PEOPLE GET MORE FROM THE GOVERNMENT THAN THE WORKERS MAYBE YOU WILL FIGURE IT OUT THAT IS IF YOU ARE THE WHO IS PAYING INSTEAD OF RECEIVING ALL THE TIME............IF YOU FOLLOW MY COMMENTS I AM NOT A CITY WORKER AND I DO BELIEVE THE CITY AND STATE GAVE OUT GENEROUS BENEFITS WE CANNOT AFFORD BUT I BELIEVE BEFORE WE ATTACK THE WORKING MAN AND TAX PYRS WE STOP WAISTING AND GIVING OUR MONEY AWAY NEEDLESS AND PAY OUR OBLIGATIONS. IF THE GOVERNMENT DID ALL THIS AND THEN STILL HAD TO CUT BENEFITS THAT WOULD BE DIFFERENT BUT UNTIL THEN THIS IS HOW I FEEL. CHECK YOUR SEQUESTER FACTS FORGET MADDOW AND MATTEWS LOOK UP THE FACTS
Stan Hanson February 26, 2013 at 09:59 PM
Better wake ujp Novan and take your LIBERAL SKULL out of your BUTTY. The GOP DID NOT create this ungodly squester. Please pay attention to the NEWS..your LIBERAL-SOCIALIST PRESIDENT invented the sequester idea with other idiots in the WHITE HOUSE!! So, STOP blaming the Republicans, as OBAMA wants you too, and look in the liberal mirror. This is the TRUTH!!
Stan Hanson February 26, 2013 at 10:00 PM
I already receive the PATCH on a daily basis.

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