Woonsocket's pension mess is symtomatic of the entire state.

RI has the first or second largest Public Employee Pension shortfall in the nation at $5 Billion.

Rocket scientest snake-oil salesman will tell you to ignore reality, ignore what is going on the market(which is down over 20% this year), ignore the massive deficits.

For example, Bob Walsh & his ilk will tell you that, magically, using "Walshian Assumptions" the whole mess will right itself in 22 short years! LOL.

Unfortunately, there are people out there that buy into his BS, as opposed to demanding to know why the taxpayers should be providing Public Employees with GAURANTEED benefits in return for minimal contributions and minimal years of service, particularly when history has proven via massive deficits that these Ponzi-scheme plans are UNFAIR and UNSUSTAINABLE.

In fact, we don't need to see what is happening to the State pensions to know this, as we need only look at GM, Ford, Chrysler, US Steel, etc.

Sadly, it is almost hopeless when you consider that even intelligent people like Andrew buy into the Walshian Nanny-state Entitlement nonsense.

It would be helpful if guys like Mr. Lepine would also educate and explain to the great unwashed that the real reason for the shortfall is the nutty Guaranteed benefits that are doled out to young retirees, coupled with meager contributions from employees that have ZERO risk.

Interestingly, the individual that ran against Menard the last two elections was a 42 year-young retired police officer collecting a Pension and free medical benefits. In other words, her opponent was a walking, talking poster child for Pension Reform. Not suprisingly, her opponent, who was previously in the General Assembly, voted against Pension Reform.

The state should eliminate ALL state aid to any municipality that doesn't switch to 401k's and institute 62 as a minimum retirement age-55 for police/fire. End of story.

Mike -

I second the emotion, I mean, motion!

While they are at it, they should mandate that anyone (including members of the GA) receiving Taxpayer funded healthcare contribute at least 30% of the cost of that healthcare.

George,

Isn't magic that makes either a defined-benefit pension plan or a 401(k) plan work. It's compound interest. Both a defined benefit can produce a similar retirement income stream, if they are similarly funded. If you're saying that a DB plan based on a 13%-of-salary total annual contribution absolutely cannot be made to work as a retirement plan without some crushingly big extra payments from an outside source, then the same thing is true of a 401(k).

You continuing insistence that DB plans are inherently flawed from a fiscal perspective lets Mayor Menard and her crew off the hook for how far they've gone out of their way to mess up the situation in Woonsocket.

Andrew,

We all understand the power of compounding interest.

But, you need principal to compound and you need to have consistent returns(i.e. compounding rates).

The main issue I and others have with the DB plans, particularly the ones doled out to public employees, is that the employee bears ZERO risk on the potential lack of returns or lost principal.

And when you have ZERO risk, you should expect minimal paybacks, not 75% or more of your highest five salary years, before age 60, that grow automatically by 3% per year starting in year 3.

And my issue with your Pension Simulation is that you didn't bother to clearly demonstrate what the Employee actually contributes (which is about 9-10% of their pay) and what they actually receive as a result of those minimal contributions.

The massive delta has got to be made up by UNCERTAIN returns (which in today's market are NOT happening) and Taxpayer contributions.

And for those that will argue that the state should have put more money in long ago, I say, our taxes are already too high!

I'm not letting Menard off the hook. I'm simply pointing out that we are doing what we usually do, which is not addressing the root cause of the problem, which are UNSUSTAINABLE pay & benefits.

I don't care if Paul Volker or Herbert Hoover were mayor, the results, given the nutty pension benefits that are doled out to 42 year young retirees who bear no risk and have no concept of the cost, would be about the same.

It is more than ridiculous that the rest of us pay 75% of Woonsocket's debt and at the same time, Susan "Truck Driver Mouth" Menard stays popular with the biddies and bluehairs by not raising taxes while in office. How do you pay for cost of living increases without a tax increase? Taking from everyone else, that's how. And now to hear that even that has been mismanaged? It's time to stick it to the people who have kept her in office and drop the state funding to at most 50% or even less.

Even worse is Central Falls! Woonsocket looks like a bargain at 75% when you see that the state pays 100% of their school system. Are you kidding me? Where is the local pride? I guess if you're used to sucking off the welfare system personally, you have no problem with your school system doing the same. I'd be embarrassed to be in office in Central Falls and take 100% of that funding from the rest of the state. Why should the rest of us pay for them? At least make them kick in *something*!!

I believe the figure for Woonsocket schools is not 75% but over 90%. Someone I'm sure has the exact number. It is not much under 90% for the pathetic "public" schools run by that corrupt, lisping, mincing freak of nature in "the capital city".

Just another example of the Dem good 'ol boys at the Statehouse taking care of Sue.

Don't crow Rhody-they take care of your corrupt freak of nature in Prov. too.
By the way-Thursday's headline is CICCILINE GETS PRISON FOR CORRUPTION.

Governor?
LOL

What is the common denominator with respect to the massive state aid provided to Providence, Woonsocket and Central Falls?

Answer: State Aid to Education

Indeed, the majority of the State aid going to Woonsocket is to fund their top notch School System. LOL.

Perhaps if a few more people got serious about taking down the sign that was posted at our state borders by the Nanny-staters that reads: “Give us your tired, your poor, your huddled masses yearning to live on the public tit, the wretched refuse of your teeming shores….”, we’d not only save money, but we’d improve our schools and have money left over to fix our roads and bridges.

Granted, the price we'd pay is that the Teachers’ Union would have to do with a few less dues paying members and the poverty pimps would have to find real jobs, but it seems to be a small & fair price to pay.

And if Rhody or someone else wants some of Woonsocket’s or CF’s state aid, I am sure their Mayors would gladly hand over the state-aid, along with the wonderful students that go along with that state aid. You know, the students that result from the welfare magnet policies put in place by the unholy alliance of Unions & Social Welfare activists, along with their wholly owned subsidiary, the General Assembly.

Rhody & Co., are you ready to make that deal? My guess is the answer is no ...or should be no if you value your kid's education.

Funny.. The Providence journal just ran a story on this yesterday. Good job to this site for being so far ahead of the game. Also funny is how the Mayor of Woonsocket and her cronies are trying to dipell all of this as a minor issue of no consequence. Looks like the house of cards is starting to shake and unfortunately the rest of us throughout the state will likely have to pick up the pieces with more state aid.