200 in RI State Pension System Retired at 45 or Younger

200 in RI State Pension System Retired at 45 or Younger

At least two hundred local and state workers retired and started to collect pensions at the age of 45 or younger, according to state pension records obtained by GoLocalProv.  

And that’s not counting anyone who received any kind of a disability pension. The remaining list includes state workers, teachers, and local firemen and police who retired under old rules that did not have minimum retirement ages. In all, the 200 early retirees have received $51.1 million in pension payments since they left state or local employ.

“To retire at age forty five or younger and immediately begin collecting a pension? It is simply outrageous that our officials enacted such wildly generous and inequitable retirement benefits—and even more outrageous that it is at the expense of the people who, for the most part, will receive nothing like it when they themselves retire,” said Monique Chartier, spokesperson for the Rhode Island Taxpayers group.

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Most early retirees from cities and towns

The bulk of the early retirees, an estimated 124, are in the state-run retirement fund for city and town workers, firemen, and police officers, known as MERS. Nearly every single one of them is a former firefighter or law enforcement officer who retired in the pre-pension reform era when someone could retire with 20 years of service regardless of age.

State employees account for another 44 of the early retirees. The rest are comprised of about a dozen teachers and a handful of State Police and former state lawmakers.

Most retired in their early to mid-40s. A few were in their late 30s. At least three of the late 30s retirees had about 20 years of service, meaning that would have entered state or local employment immediately after high school.  

“The fundamental problem is that Rhode Island government has lost sight of what a pension is supposed to be about. What began as a program intended for retirement has transformed into a simple benefit,” said Justin Katz, research director for the Rhode Island Center for Freedom and Prosperity.

“Of course, 45 should not be considered retirement age. At that age, an employee who worked 20 years could still be ‘retired’ for twice as long as he or she worked. If we understood ourselves to be funding actual employee retirement, then we could hold back any payments at all until age 65. Rational solutions like these, though, miss the central fact that government pensions are nothing other than a gravy train,” Katz added.

Pension reform pushed minimum ages

Most early retirees started collecting their pension before a series of pension reform laws that instituted mandatory minimum retirement ages and then progressively hiked them up.

A 2009 law set a minimum age of 62. Beginning in 2011, the minimum was tied to the Social Security retirement age. The age has been lowered again under the most recent pension overhaul and is 59 for the bulk of workers vested in one of the state pension funds, according to Frank Karpinski, the executive director of the state pension system.

In addition to the absence of a mandatory minimum, workers historically have been able to purchase years of service credits in the state system, usually based on prior military service, Karpinski added.

Impact on retirement income debated

While some warned of the impact early retirements have on the pension system, others say the small amounts these retirees earned suggests otherwise.

“One of the most surprising things about these data is just how small so many of these pensions are—the median pension on this list is just $43,750. Sadly, so many Rhode Island seniors struggle to make ends meet. We need to build a strong pension system, so every Rhode Islander can retire with dignity—including our teachers, police, caseworkers, firefighters, and other public sector employees. There is a retirement crisis in this country, as more and more seniors face a cycle of debt and financial ruin,” said Sam Bell, the state coordinator for the Rhode Island Progressive Democrats.

“We also need to recognize that many jobs are miserable. For some workers, retiring early for a reduced pension makes much more sense than continuing to slave on in a job they hate.  Where early retirement can be an issue is when conservatives use it as a tool to try to force workers out of their jobs in order to save money in the short run. We do have to guard against those sorts of abuses,” Bell added.

But Katz counters that an early retirement pension can also become a cushion for former public sector workers as they launch out into new career paths. “The intention of a pension should be to fund retirement, but in Rhode Island, it’s too often a baseline income to enhance a second career, either in the private sector … or the public sector,” Katz said. “It’s gotten to the point of being abusive—disgusting, even—when it’s absolutely clear that the people of Rhode Island are working to serve government employees instead of the other way around.”

Causes of the pension ‘quagmire’

Chartier points to early retirements as a long-permitted abuse that contributed to the state’s pension funding crisis.

“The ability for decades of public employees to retire after only twenty or twenty five years and immediately begin collecting pensions is one of the big reasons that the state pension system came into crisis. How is it even possible to fund such rich pension benefits?” Chartier said.

But Philip Keefe, the former head of SEIU Local 580, says the small-income state workers who retired with modest pensions are not the reason the system is in trouble. Instead he points to figures such as former Gov. Philip Noel, whom Keefe has said purchased credits in the state pension system from his time employed in Warwick.

“Those are the exceptions to the rules that put a drain on the system that got us into the quagmire we got into,” Keefe said.