Benefits drive high city retiree health costs

Part two in a three-part series examining the costs associated with health and pension benefits throughout the city of Warwick


Warwick has experienced significant cost increases in supplying health and dental benefits to its active and retired employees since the city started uploading its budgetary information online, which goes back to Fiscal Year 2003 (July 1, 2002 to June 30, 2003).

This second part in our three-part series examining union benefits will dive deeper into the financial implications of those benefits, both in terms of healthcare and in pensions. It should be noted that this analysis is based upon current and historic city budgetary data and actuarial reports that cover FY18 (July 1, 2017 to June 30, 2018), as that is the most current data available.

This piece intends to objectively assess the costs associated with the benefit packages outlined in last week’s Beacon, which observed the specific health care plans, prescription benefits and supplemental Medicare benefits afforded to active and retired members of the unions – as well as the structures of defined benefit pension plans that they receive upon retirement after a certain length of service to the city.

This piece will then examine major cost differences as a result of the comparatively unique benefits given to the unions organized under the Warwick School Department – the Warwick Teachers’ Union (WTU) and Warwick Independent School Employees (WISE) Union. Differences in benefits granted, as seen in the data, directly correlate to a vast difference in costs associated with them.


During FY03, Warwick spent a total of $9,708,819 on healthcare and dental benefits for the active and retired members of its three collective bargaining units (fire department, police department and municipal employees). In FY2010, that number increased to $17,033,113.

As of the most recent budget, FY2020, the cost for supplying union employees with medical and dental insurance has jumped more than 150 percent from the FY03 number, to $24,601,662, and represents a 44 percent increase from 10 years ago.

Increasing costs associated with providing healthcare to active employees shouldn’t come as a surprise. According to a study from the Journal of the American Medical Association in March of 2019, healthcare spending in the United States as a whole rose about a trillion dollars between 1996 and 2015. In 2017 alone, the country spent about $3.5 trillion on healthcare, which is expected to rise, according to the study, to $6 trillion by 2027.

Rather, the noteworthy expense in Warwick is money spent on medical benefits for retirees. As last week’s article highlighted, all employees – and their spouses – hired prior to June 30, 2015 that accumulate 20 years of service (in the fire or police departments), or 10 years in municipal service, are entitled to a supplemental healthcare plan through Blue Cross that eliminates co-pays for most services associated with Medicare, which retirees become eligible for when they reach age 65.

Additionally, members of the three groups get an out-of-pocket prescription cap of $300 per individual and $600 for a family plan, which could potentially leave the city on the hook for large prescription bills for the remainder of a retiree’s life, especially if that person has any number of chronic conditions which often require the taking of multiple, expensive medications daily.

Employees hired after June 30, 2015 will still be eligible to receive both of these benefits in retirement, but for individual coverage only, after they attain 25 years of service*** (Editor's note, this has been corrected from an error stating such employees only needed 20 years of service) in the fire department or police department, or 10 years as a member of Council 94.

Specifically looking at healthcare benefits given to retirees, costs have increased from $3,557,456 in FY03, to $6,196,160 in FY2010 and currently contribute to a $10,435,972 cost within the FY2020 budget. This represents a 193 percent increase in the cost of supplying retiree health benefits since FY03 and a 68 percent increase from 10 years ago

These costs have been seen across the board in all three unions. The city spent $1.34 million on retiree healthcare in FY03 for IAFF (firefighter) members, versus $3.6 million in FY20 (169 percent increase). The city spent $1.14 million in FY03 for retired FOP (police) members, versus $3.4 million in FY20 (200 percent increase). And the city saw its largest retiree healthcare expense increase in its Council 94 (municipal employees) union members, which went from $1.07 million in FY03 to $3.4 million in FY20 (a 216 percent increase).


The City of Warwick spent $35,026,144 to continue funding its pension obligations to its three collective bargaining units in FY20. Overall, the city still faces a net pension liability of $453.5 million, according to the most recent pension report for FY18.

Still, this doesn’t necessarily mean the city is in financial peril regarding its pensions. Both the Fire 2 and Police 2 pension funds are funded well, at 85.3 percent and 83.4 percent respectively, according to the FY18 reports. The municipal pension is a little worse off, at 72.6 percent funded with a liability gap of about $50 million – however the city has made its annual recommended contribution (ARC) payments for all funds each year and, if it continues to do so, those liabilities will eventually plateau and decrease.

The largest area of concern regarding pensions continues to be the Fire and Police 1 pension, which has a total liability of over $300 million. Of that liability, there is only $72.8 million in assets within the pension plan, meaning it has a funding ratio of a little over 24 percent.

The vast majority of this liability comes from the Fire 1 portion, which covers 327 retired members of the department and has seven active employees remaining that qualify for this pension. It has a total liability of $260 million. The city’s most recent pension contribution for this fund is by far the largest in the city, at $16.3 million for FY20. The average benefit for a member retired in this plan is $57,606, the highest average among any plan in the city. Its seven active members make an average of over $100,000.

The Police 1 portion, comparatively, covers only 96 retired members of the department and has no active members. The city’s contribution to the Police portion of Police/Fire 1 was $2.57 million in FY20.

That Fire/Police 1 pension will continue to increase in costs by 2.75 percent as the years go forward, until the pension is at least at 60 percent funded. It is projected in the FY18 report to require an ARC of $21 million by 2023.

The pension contribution rates across the board for the unions vary, but for the most part the city contributes two-thirds of the percentage of total payroll covered that is determined by the actuary to be needed to adequately fund the accounts.

For example, in FY18 there was $14.59 million in projected covered payroll encompassed by the Police 2 pension plan. Of that money, the actuary has determined that the city must set aside 48.16 percent of that payroll in order to keep the pension on track to be adequately funded when members retire. Of that 48.16 percent, two-thirds is the responsibility of the city (32.1 percent), while the final third is taken from the employees’ pay (16.05 percent).

A factor to keep in mind that is also driving increasing pension costs is that employees who were hired prior to June 30, 2012 in both the fire department and police department get 3 percent, compounded cost-of-living adjustments (COLAs) to those pension payments in perpetuity, each year for the length of their retired lives. Those hired after that date get a COLA as well, but it is based on the Consumer Price Index, which on average amounts to far less than 3 percent each year.

OPEB and Comparisons to the School Department

Much has been made of the concept of OPEB (other post-employment benefits). To put it simply, OPEB refers to the large picture of costs associated with providing healthcare to all union employees in the city throughout the remainder of their lives following retirement. In a recent report to the city council, Marcum LLP reported the city faces OPEB liabilities of more than $352 million on the city side. Some have argued that number is actually higher, but for the sake of this piece we will use it as a benchmark.

Some have painted these projected OPEB costs as evidence the city is approaching bankruptcy, as Warwick isn’t putting any money aside as a means to cover these costs in the future. Others, however, have downplayed the OPEB number as a faulty representation of hypothetical costs extended throughout many decades – a formula that could make any expense look insurmountable. People in this camp claim that as long as the city can make its annual healthcare payments to active and retired employees, an extrapolated, long-term view of those expenses is relatively meaningless.

Regardless of where you land on that spectrum, the fact about OPEB projections is that they are a solid indicator of how costly medical insurance plans afforded to workers truly are. And whether or not they indicate looming financial ruin in Warwick, they certainly provide the most concrete comparative example of the differences between the school department and city collective bargaining units.

While the city has, as mentioned above, a projected OPEB liability of $352 million, the school department’s two collective bargaining groups – which include more active employees (about 1,175) than all three of the city’s unions (about 726 active employees as of the FY18 reports) – has an OPEB projected liability of just over $53 million.

While the school department spent about $19 million on health and dental benefits for its active WTU and WISE members in FY20, the department only spent a little over $525,000 on retired members of the same two groups. A stark contrast from the more than $10 million spent on retiree healthcare for the three city bargaining units in the same year.

This is due to a couple of reasons. One reason is quite simple – neither WISE nor WTU members are provided the Plan 65 Medicare supplement that is given to IAFF, FOP or Council 94 members following their retirement, nor do they get any benefits towards prescription medication.

The other reason is a bit more complicated, but it has to do with the pension reform initiated by Governor Gina Raimondo during her first term in office, which among many other things, increased the amount of time a teacher would need to work in order to receive their full pension benefits. As a result, teachers and WISE employees in Warwick will not generally be able to retire until age 62 at the youngest.

Contractually, WISE and WTU members are entitled to receive healthcare at the city’s expense until they reach age 65, but three years or fewer of city-covered insurance comes at a far lower cost than members of, for example, the Warwick Fire Department, whose covered members in the Fire 2 pension plan have retired at an average age of just over 51 years old, meaning they would get full health coverage at the city’s expense for 14 years, and then get the Medicare supplement afterwards.

The pension reforms also made an impact on how much the Warwick School Department has to set aside for pensions. The details are too complex to cover in full for the purposes of this piece, but essentially the pension reform made it so the city will now always contribute about 15 percent of the total payroll for certified staff (which includes teachers and administrators). That number was on track to climb over 20 percent prior to the reforms, according to school finance director Anthony Ferrucci.

These differences have stabilized retiree healthcare costs for the school department in a way that is not seen on the city side for its collective bargaining units. The school department also does not have to factor in regular COLAs to their pension contributions, as WISE gets no COLAs and WTU members only get COLAs if the state pension fund achieves high returns on its investments and attains a certain funding level.

In summary

The long-term costs associated with providing healthcare benefits to retirees – as bargained in contracts between the city and its fire department, police department and municipal employees – result in significantly higher costs than the city’s school department, which doesn’t provide similar retiree health benefits. Retiree healthcare costs associated with the city’s three collective bargaining units have increased by more than 190 percent since the fiscal year that ended on June 30, 2003.

The state overhaul of the teacher pension system that began in 2011 has also contributed to lesser retiree costs for the school department, as members are mostly unable to retire prior to age 62, and the city can more accurately predict its contribution requirements year to year.

Next week, this series will conclude by talking to members of the city’s unions and city government, to provide information for readers to decide for themselves whether benefits given to these members are insufficient, fair, or excessive.


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So much for updating the false info from the first part of this series.

4 days ago
Ethan Hartley

Jimmy, I just updated the other article to reflect the $90/week insurance for IAFF members.

4 days ago
Patient Man

Jimmy, get together with Ethan & a city lawyer. Pour over the contracts & the #'s until the 3 of you come to an agreement on what the reality is. Saying he's wrong without documentation & being unwilling to meet with him doesn't help your credibility.

4 days ago

Who said I’m unwilling to meet?

4 days ago
Patient Man



I’ll meet, no problem. As soon as the real FBI story is written.

4 days ago

That is correct, update the FBI story and I’ll meet.

4 days ago

The prior article of this series said the city was “self-insured” for healthcare, and “the city insures itself with money from its budget rather than going through an insurance company”. So if there is no insurance company, it’s not clear how to reconcile that with this article, which says: “As of the most recent budget, FY2020, the cost for supplying union employees with medical and dental insurance has jumped . . ” Is this supposed to be insurance or self-insurance ? How does self-insurance jump? More and longer hospital visits? With self-insurance, you only pay for what you actually use. An insurance company mitigates the odds of any possible claim by raising rates, which you pay for, whether you use it or not.

4 days ago

I'm also assuming the covered population is mostly healthy, for self-insurance

4 days ago
Thanks Mr. Hartley

Thank you Mr. Hartley for educating the taxpayers as to why their taxes continue to skyrocket. The benefits the city workers receive are ridiculous.

Don't listen to Jimmy....Apollo etc ....they are just union hacks.

Finally someone is opening the curtain and letting us know what benefits have to be cut immediately.

4 days ago

I will second the kudos to Ethan Hartley and the Warwick Beacon, as this important issue affects us all. Thanks for the coverage.

4 days ago

"Employees hired after June 30, 2015 will still be eligible to receive both of these benefits in retirement, but for individual coverage only, after they attain 20 years of service in the fire department or police department, or 10 years as a member of Council 94."

^ ^ Police after 2015 hire and 25 years, not 20

Another issue is all the hysteria about stripping benefits which creates panic and more and more members retire as soon as they're eligible which of course stresses the system.

Has the active employee pension contribution been covered? Hundreds of dollars per menber weekly. Somewhere in the area of 15% in addition to healthcare copay.

4 days ago

WOW, I wish I could retire at 51 with FULL BENEFITS! And they are still capable of working! Can you say "Double Dipping"?

No wonder those folks are eating lobster and steaks while I dine on spaghetti.

What a racket!

4 days ago
Ethan Hartley

Thanks for the correction Bubbaburger, I've made that note in the article.

As for bill123's inquiry, I apologize if I'm misinterpreting your question, but my understanding is that the city has to re-bid for health care each year. Whether you're self insured or utilize a traditional insurance approach, you still owe the insurance company the price of the plan's premium for all the members that plan will cover, which is why you see these cost increases over time. Self-insurance just means the city takes the risks associated with handling claims, which can obviously fluctuate year to year depending on how many claims are filed. As I understand it, going self-insured saves money in the big picture, but opens the city up to more risk. There is stop loss insurance, too, in case an unexpected amount of members get hit with particularly expensive illnesses, like cancer.

4 days ago

Ethan, with self-insurance, there is no premium to pay, according to the Self-Insurance Institute of America Inc. A question that arises here is “What is a self-insured health plan?”, and is answered at Is this the kind of plan you are referring to ? Who is the insurance company, and how does WB Community Health fit in ?

4 days ago
Ben Dover

mr. hartley; As long as we are talking about scary numbers, think about this. You are using 2017-18 numbers and that is fine...

The total payroll for Warwick Fire, Police and Municipal workers including benefits.

The total number of retirees and family members that are receiving benefits.

The total number of employees getting disability benefits paid by City, State or federal SSDI.

Take the total dollar amount and devide by recipients to come up with an average dollar cost...

What is unclear to many is taxpayers are funding 3 units, current employees, retired employees and disabled employees...Show us the money.

3 days ago
Patient Man


Adding a precondition isn't being willing to meet. Your credibility continues to melt. You were the 1 union voice that has regularly been willing to talk about substance as opposed to attacking the messenger. Sure you attack the messenger, but you also are willing to address substance. Don't wobble now. Your coworkers & the city deserve honest debate & facts.

3 days ago

Honest debate? how can their be an honest debate when lies are spread from 1 side daily. My question is why is the Beacon not following up on why there was no FBI investigation. There was a lot of talk (and there is a real reason the FBI called) it had ZERO to do with the fire department. I’ll give you Factual answers to any question. Fire away.

3 days ago

OK, Jimmy, I'll ask a question - what is your real reason the FBI was called that had nothing to do with WFD?

2 days ago

Squad out in force on this article lol.

Comical they mention federal benefits. I thought this fight was about CITY TAXES. Just proves this is about personal biases. That is the squads motive. If I wasn't so old I'd take the time to research and hire a private investigator on each squad member and then put it all over youtube. I know they have skeltons in their closets.

So, you talk about any city employee disabled collecting federal funds. Ok what's your point???

Perfectly legal and just.

I see no problem with this report other than pd 1 and fd 1 drags down everyone. I've said this before, shore up those 2, problem solved.

By the way, side notes. E.R. visit for city workers a cool $100.00 co-pay. Next year municiple pays more into pension fund. Afscme always in good faith.

2 days ago

Jimmy these squad members Stacia, Cote, Cushman, Block are liberal progressive democrats. It's right out of Cnn's playbook to make up a fake news story aka fbi visits WFD. They won't retract any fake news story nor will the Beacon. But who cares really. We all know it was a hoax all along .

Healthcare, you worried about healthcare. Vote for Liz Warren aka pocohontas. She will take from the 1% and give to the poor.

2 days ago
The Real Squad

If there is a "squad" (agenda driven people who are not honest about facts of the debate) it may be the side who heckled citizens at town meeting, "boycotted", intimidated, and more. Fake "fire inspections"? "Lost" public documents paperwork when it is requested. Trying to cost a respected and gentlemanly citizen his private sector job simply for asking questions about his government?


So, let's get real.

2 days ago

Ha, any fire inspection that shows violations is to be dealt with I don't care who you are ! Btw I'm not a firefighter. Another example of you being a hypocrite! Oh the poor businessman with numerous violations. Next time Warwick gets a tip they need to have the State follow up so the city doesnt get blamed. Who was the business owner? Block? Again, the squad members need to be followed by private investigators.

2 days ago

Yes I'm all for boycotts. I'm a huge Trump supporter. The man is great. When a business doesn't let me come in wearing my Maga hat it gets boycotted.

No different. The city workers aren't going to spend money at a business that doesn't support them. Perfectly legal. Boycotts work.

2 days ago
Apollo Greed

Please go away!

2 days ago

No greed. Just hard working, educated, middle class professionals and heros.

The squad can go away !

Yesterday at 8:07 AM

The Mayor needs to concentrate on growing the city and increasing revenues.

There still are plenty of locations for businesses to go up and new homes to be built. Any vacant business needs to be taxed heavy so owner either sells or builds.

The vacant location across from the shell rt5 and East ave. Why the hell does that just sit there for years? Eye sore, prime spot.

Why aren't there cameras up on traffic lights? Safety and revenue.

TF Green takes up all that real estate and that really screws the city. They don't pay enough to the city. Not to mention the fire department is there every day for calls I hear on my scanner.

Time for the Mayor and councilman o stop listening to these bafoons and think outside the box for growth !!

Start building up like other cities. Can't put up skyscrapers cause of the airport but if the hotels can build up several stories. More affordable housing complexes! This state has a demand for affordable housing!!! Huge potential. Investors and builders take note.

Yesterday at 8:21 AM

The coast line in Warwick needs to be better managed. Think Florida! That is where the rich spend their money on the water. That's how Charlestown has the lowest taxes in the state !!!!

Yesterday at 8:24 AM


The FBI story was about a city council Pres who hired his own friend/firm to do an audit. A clear no bid violation. Who is the only person that has said he actually talked to the FBI? The council Pres. He was the one being investigated. To distract, he muddied the water about the fire department, a group he vocalizes his dislike for at every meeting.

How did the FBI get a tip? One of his fellow councilors dropped the dime on him.

Lots of false stories about a great department. Cote claimed the department owes the city millions in shift swap schemes. If anything that guy said was true it would be a big story. Reporters write the story and then never follow up to see if what the first write is true. It never is, but they never write a story cleaning up the crap, because crap sells. If they ever get a contract let’s see how much of an impact Mr. Cote has on it.

Yesterday at 9:30 AM

All the workers know we have been fleecing the taxpayers for yrs.

The WFD knew the side deal with made with Avedisian was wrong but we didn't care it's all about greed. The taxpayers are stupid and don't pay attention and we own most members of the city council.

The benefits we receive (pension and healthcare) would bankrupt any business but who cares we deserve it.

I 'm proud to rip off the Warwick taxpayers.

Yesterday at 8:04 PM

How pathetic and low some will go impersonating another commenter. This jimmy is why the squad and other hecklers have no morals.

All they do is okay games such chi!fish behavior.

The real Jimmy should ignore you but probably won't.

Yesterday at 8:09 PM

All they do is okay games with childish behavior. Talk about immaturity ! Don't you get tired of embarrassing yourselves ?

Yesterday at 8:12 PM


You are wrong. The FBI investigation was about manipulation of contract language which allowed the WFD to abscond hundreds of thousands of dollars due manipulating the final draft language of the fiscal note after the contract ratification. There is no debate about these facts. The documents have been made public, they are available to anyone who wants to read them, so stop being the one and only voice attempting to justify the decade long thievery of the WFD.

Furthermore, as an anonymous entity, how do you think that you have any credibility with your statements when you continually fail to present facts and only present your own theories and hearsay? Not everyone thinks you are the self proclaimed hero's. So get off your high horse as most of us know that you are a nameless coward that is a co-conspirator to robbing the taxpayer.

Yesterday at 8:16 PM

Nice farce. Now they are using peoples names as their ploy. This is the cries of desperation. How pathetic and childish.

Certainly this budget compared to major companies is quite in line with proper compensation.

Yesterday at 8:19 PM

Look at the lowlifes stooping to impersonating the commenters. I’m done in this comment section. Stacia and Rob, you are two of the biggest piles of excrement that has ever breathed air in this city. Can’t wait to see your mental state in the coming month... gonna be fun watching the meltdown

Yesterday at 8:22 PM

If the FBI investigation was about contract manipulation, why did they not speak to one person retired or active on the fire department. Why was not one document ever analyzed. Why? Surly if there was wrongdoing someone would be contacted. Rob and Stacia, loony city....

Yesterday at 8:25 PM
know the facts


Your right....Charlestown has half the tax rate that Warwick made the case why unions have destroyed Warwick...Charlestown has a volunteer fire trash pick=up....that's why Charlestown has such a low tax rate

Yesterday at 9:56 PM
Charlestown facts

Charlestown has a population of under 8000 people and does less than 300 calls per year . Warwick has over 80000 residents and responds to 17000 calls per year so not sure where you’re going there ?

Yesterday at 11:44 PM


look at Richmond, low population, no services, high taxes. The difference is not volunteers or population or call volume. It is the tax base of the wealthy along the coast !

You were wise to move there I will give you that but this really proves to me how uneeducated you are.

Did you graduate from high school? Juat curious. I know your primary sources of revenue is alimony and your facebook web page farce about city workers.

9 hours ago


Forgot to add. Charlestown has a few dozen businesses. Warwick has thousands

We can't forget that tax base.

The Nordic Lounge is nice you should check that out on a date with Cote.

8 hours ago
know the facts


You keep making my point....the only rich retirees in Warwick are the WFD retirees with their ridiculous pensions

6 hours ago

Using another persons username and posting bogus information is downright scumbaggish.

If your argument resonated you wouldn’t have to resort to attacking another members position.

6 hours ago

Let it be known to all of you (both) that I do not impersonate. Unlike Jimmy and his 2 other WFD buddies, I call it like it is under my own name. The fact of the matter is that one only need look at the budget to see how the WFD and the other unions have been gaming the system for years. By the way, this rag blog has become so monotonous that it is not worth the time to look at.

5 hours ago

Oh yeah Jimmy, whoever you are you coward un-named wimp. Any time you want to face off just let me know.

5 hours ago


You bow out because you're beaten. Run with your tail between your legs. You know there have been many excellent examples, scenerios, facts presented in this debate. You have lost. The FBI story was a scare tactic, hoax. Perhaps you did try to go that route by contacting their agency but they didn't entertain it.

Stacia isn't even making sense any more. Incoherent ramblings. She no longer is a tax payer of Warwick. No reason for her to care about Warwick anymore. Just enjoy your life and let it go.

The numbers will all work out. The sky is not falling and never has.

4 hours ago

Cote what is your problem ? When has anyone resorted to physicality?

You say your a bad ass but you don’t know who your challenging on the other side.

This may or may not catch up to you someday.

As for anyone confronting you it’s not out of getting there ass kicked by you it’s about getting sued by you.

Here’s the thing no Warwick employee is going to lose a piece of their pension to you by kicking your ass.

Sadly Dan York, The Beacon and local news outlets stroked you and lo and behold your accusations couldn’t sustain.

You won’t go away so all one can do is let you ramble get your exposure and shake our heads.

2 hours ago

I’ll attempt to answer my own question, on how WB Community health fits into all this: The web address for WBCH is However, as of as least right now (Nov 11, 2019), that address is offline. We can instead go to This is an archived page from 2 years ago. This page describes what looks like self-insurance. They say: “WBCH does not pool member funds and each member has a separate account into which that member’s monthly payments are deposited and against which that member’s expenses are charged” and “each member remains responsible for all their own claims and expenses at all times”. However, if you go to the Home page, it says “WB Community Health is dedicated to purchasing high quality, comprehensive health insurance and providing value-added benefit services”. So they also say they are buying health insurance plans, presumably at cheaper group rates. How this scheme is supposed be efficient or cost effective, using “self-insurance” plus standard insurance together simultaneously, has not been explained. It also looks like Blue Cross processes claims, not WBCH.

4 minutes ago