2 cities get OK to use Google settlement for pension fundingReprints
The Justice Department granted a waiver on Friday to allow two Rhode Island cities to use a portion of their share of a $500 million federal settlement with Google Inc. to bolster the funding of their law enforcement pension plans.
North Providence and East Providence were each awarded $60 million in April after assisting the Justice Department in an investigation into online advertisements distributed by Google for Canadian pharmacies illegally marketing prescription drugs to Americans.
The two cities requested using the funds, which are limited to spending areas such as training, equipment and facility upgrades, for pension funding purposes. Attorney General Eric Holder issued the waiver last week that will allow East Providence to use $49.2 million for its law enforcement pension plan and North Providence, $20.6 million for its police plan.
The fresh cash will boost the North Providence Police Pension Fund's assets to $33 million and make it about 95% to 100% funded, said Thomas Massaro, city finance director. The additional money will be given to Wells Fargo & Co., which manages almost all of the pension plan's assets, Mr. Massaro said in a telephone interview.
The East Providence Police and Fire Retirement System had about $53.5 million in assets and a funded status of 37.9% as of Oct. 31, 2011, according to its most recent actuarial valuation. Malcolm Moore, finance director, did not return a telephone call or email by press time for information on how the additional assets will be managed.
Kevin Olsen writes for Pensions & Investments, a sister publication of Business Insurance.