Two California cities, Pacific Grove and Canyon Lake, are trying to end their participation in CalPERS – the statewide public pension plan. The communities are unable to bear the cost increases in their retirement systems, which they are unable to control today. Now we hear news of another community and a non-profit group on the other side of the country that are trying to untangle themselves from established pension plans.
Ted Nesi, reporting for WPRI, details Coventry, Rhode Island officials who are trying to walk away from a non-teacher school worker pension plan:
Elected officials in Coventry have taken an apparently unprecedented step by washing their hands of responsibility for one of their employee pension plans, saying taxpayers have no obligation to come up with enough money to stop it from running out of cash within 12 years.
The decision about retirement funding for the town’s 349 non-teacher school workers and retirees has shocked members of a state commission tasked with overseeing local pension plans, and they’ve summoned Coventry leaders to a special meeting in Providence next week to defend it.
How much money is involved? (emphasis mine)
The pension plan for Coventry schools’ support personnel was created in 1977 by the School Committee and the town teachers’ union. It has less than $11 million in assets to cover a $35 million liability and is on track to run out of money to pay retirees by 2025, according to actuarial projections.