Rhode Island's capital city had, it would seem, only the best intentions in promising its firefighters and police a healthy pension plan with generous cost-of-living increases.
But as a recent Reuters report discusses, those who were gifted with pensions that multiplied with annual six-percent COL boosts, are now seeing their benefits modified or dropped as the state becomes less and less able to pay its bills and tries to contend with a billion-dollar deficit.
As an example, former fire chief Gilbert McLaughlin, now 75, makes $196,813 a year as part of his pension; under the initial payment plan, he could have been making as much as $700,000 a year if he'd lived to 100, with his payouts doubling every 12 years.
"Nobody ever did the math on this," Paul Doughty, head of the local firefighters' union, told Reuters.
The automatic raises have ended and payouts have been capped; the issue points to a larger, across-the-board problem in America of cities and corporations that are now unable to follow up on the promises made to their longtime employees.
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