Pension Reform in Johnston

Out of necessity (ya think?) they're reforming pensions in Johnston. Stephen Beale reports on why:

One of the biggest problems is with disability pensions. Out of 71 retired firefighters, 34 of them are on a disability pension, earning two thirds of their salary tax free. During the tenure of former Fire Chief Victor Cipriano, 15 firefighters retired—and all 15 went out on disability pensions. Even Cipriano himself went out on a disability pension, earning more in retirement last year than he did while working.

To put the numbers in perspective, just 8 percent of the firefighter pensions in New York City are disabilities. In Johnston, the disability rate is above 40 percent. “Those are unusual numbers,” Rodio said.

Rodio has estimated that 25 firefighter disability pensions are in violation of not one, but two state laws—one that says a retiree cannot earn more than he did while employed by a city or town and another that says those tax-free disability pensions needed to be approved by the state retirement board.

The fix:

A police officer or firefighter who retires on a disability but gets another job will be considered partially disabled and can receive only half of their salary, rather than two thirds.

The ordinance also goes out of its way to define salary as base pay—excluding overtime pay, holiday pay, and other benefits from being used to calculate a disability pension.

In the future, a police officer or firefighter applies for a disability will have their case reviewed by three doctors—two of whom must confirm that the person is actually disabled. Once the disability pension is approved, a retiree has to undergo an annual physical and submit a sworn statement documenting how much they have earned for the year.

The three doctor review panel has been mentioned around here before and basing pension on base salary seems like a common sense thing. As does recalculating disability pension if the pensioner gets another job. However, as usual, this is all "going forward." It's not really clear if existing pensions will be reviewed and modified. Finally, its worth noting that, according to Beale's story, the public came out to lend their support to the proposal while police and fire were silent.