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The town has already collected $4 million of a possible $13 million in extra money hidden from the budget process.
News & Commentary
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Original Reports
Taxpayers as an Excuse for Town to Gamble on Stocks
Question: What happens if Tiverton doesn’t make enough money from its pension fund investments? Having written a whole lot about government pension funds over the past five to 10 years, including in this space a few weeks ago, by far the biggest frustration, for me and for others who are skeptical of this employee benefit across the country, is the overly optimistic amount of money that governments assume they’ll make on investments. In Tiverton, as in Rhode Island, the number is 7.5%, which is just not plausible. The intention of funding a defined benefit pension in advance is to make sure that the state, city, or town has covered the cost of each employee while that employee is still working. Theoretically, whenever an employee retires, the government employer will have put aside enough money so that taxpayers don’t have to continue paying for work that was performed in the past. Otherwise, as is happening with Tiverton’s police department, taxpayers wind up paying two or three livelihoods for each worker actually on the force. Indeed, when I read through all of the Rhode Island municipalities’ experience studies a few years ago, I couldn’t help but feel like the investment advisors weren’t really telling elected officials and …
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Resources
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Links to documents relevant to town government that may or may not be available elsewhere.
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