Providence Loses Case Against Consultant Over Pension Calculations

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A judge ruled against Providence, Rhode Island this weekend in a case brought by the city against its pension consultant.

The city claims that Buck Consultants miscalculated the savings that would result from a 2012 pension reform measure that suspended COLAs for the city’s retirees.

More from WPRI:

A U.S. District Court judge ruled Friday that Providence officials failed to prove how the city would have saved millions of dollars if its longtime actuary didn’t make errors in analyzing the city’s 2012 pension reform ordinance.

U.S. District Court Chief Judge William E. Smith granted a motion for summary judgment filed by Buck Consultants, the firm the city accused of negligently overestimating savings it would generate from suspending retiree cost-of-living adjustments (COLAs) by at least $10 million.

Lawyers for the city argued that Providence relied on Buck’s opinion that the COLA suspension would save the city $180 million when it negotiated a pension settlement with its public safety unions and retirees, but the estimate should have been $170 million. If Buck gave an accurate assessment, lawyers argued, the city would have sought an additional $10 million in savings from the settlement or moved forward with the original pension reform ordinance.

In his decision, Smith called the city’s damage theories “inherently speculative,” arguing that officials did not “present any evidence showing that it actually could have succeeded in getting any further concessions from the unions, let alone in what amount.”

Providence was seeking $10 million in damages.

 

Photo by Joe Gratz via Flickr CC License

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