Mayor Taveras Statement on the City Council's Passage of the Providence Pension Protection Plan

Mayor Angel Taveras released the following statement this evening applauding the City Council for their unanimous 15-0 vote to pass the Providence Pension Protection Plan:

"I commend the Council for making the tough choices to move Providence forward. The Providence Pension Protection Plan is a big step toward the necessary structural changes we must make to position Providence for the future. The current pension system is unsustainable and driving the capital city toward a black hole. The reforms that the Council passed tonight with overwhelming support from the community, business leaders and the Local 1033 Laborers union will help strengthen the city's fiscal ground and help put Providence on a sustainable fiscal path in future years."

"I understand the difficult choice that Council members had to make, and I applaud their courage. Ultimately, a vote for the Providence Pension Protection Plan was a vote to support working families, small business owners, taxpayers and dedicated city workers who have sacrificed to save Providence."

During his budget address on Monday night, Mayor Taveras called on the Council to pass the Providence Pension Protection Plan. City actuaries expect the reforms to save at least $16 million in FY13 and reduce the city's unfunded pension liability by more than $236 million.

The reforms suspend all guaranteed annual raises (COLAs) for current workers and retirees until the pension system is 70 percent funded and caps all future pensions at one-and-a-half times the median state household income. The reforms also reduced the disability benefit from 66.6 percent of an employee's final salary to 50 percent. Lastly, the reforms changed current rules that allow employees to stop contributing after 25 years of service and requires employees to contribute as long as they are earning credit toward a pension.