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Providence Mayor Jorge Elorza is looking to fix the city s massively unfunded pension liability with a $704-million pension obligation bond. Elorza confirmed the news in a Zoom call with reporters Thursday after City Council President John Igliozzi and House communications director Larry Berman shared details with The Providence Journal on Wednesday. Providence would have 25 years to pay the money back at a fixed rate with around 3% to 4% interest and a call provision in 10 years. Currently, the city s pension system is 22% funded. The mayor s plan would boost funding to 65%, surpassing the city s 60% obligation. At the heart of the matter is the reality that the city s current payment schedule is unsustainable. In fiscal year 2020, the actuarially determined contribution totaled $86.7 million and will continue growing at a rate of 4% to 5% per year, peaking in fiscal year 2040 at $227.5 million. That outpaces the growth of the city s tax base. ....
PROVIDENCE, R.I. (AP) Rhode Island Mayor Jorge Elorza is seeking a $704-million bond to fund Providence’s unfunded pension system. The city would have 25 years to repay the debt at an interest rate 3% to 4%, with a call provision in 10 years, the Providence Journal reported. The city’s pension system is currently 25% funded and the bond would increase funding past the city’s 60% obligation to 65%. The actuarially determined city contribution. ....