State, public unions and retirees reach pension settlement deal
By Dee DeQuattro and Mark Curtis
A pension settlement deal was reached by attorneys representing the State of Rhode Island and attorneys representing public employee unions and retirees.
Upon passage of the settlement all retirees will receive an initial 2% cost of living adjustment. Following the one time COLA the proposed deal will keep the COLA suspended until the pension system is eighty percent funded. The deal does however allow for an intermittent COLA every four years instead of once every five years as originally provided in the legislation.
The State of Rhode Island will be asked to contribute $13 million to help pay for the settlement changes and local cities and towns will be asked to contribute $11 million, for a combined $24 million.
The initial pension bill was estimated to save taxpayers an estimated $4 billion dollars, the new legislation is a slight decrease with $3.9 billion in savings.
The settlement must now be approved by the General Assembly and 6 employee union groups. The employee union group will have 60-days to vote on the settlement deal. If any of the groups do not agree to the settlement, then the deal cannot move forward.
“Today is a very good day,” said Governor Lincoln Chafee regarding the legislation.
General Treasurer Gina Raimondo said the deal secures pensions and secures the future of Rhode Island. She noted that coming to an agreement will save the state millions of dollars in legal fees.
Raimondo said she was initially skeptical going into talks about the Pension Reform bill but what came out was a real “solution.”
Not everyone was satisfied with the deal. Cranston Mayor Allan Fung, who is running for governor in 2014, criticized the settlement saying the deal puts the burden on the taxpayers by requiring local and cities and towns to contribute more to the public-pension system.
“This is not the time for political grandstanding,” said Raimondo. “It is math not politics,” she added stating that the pensions affected real people and their pensions.
The Cranston Firefighters Union was also dissatisfied with the deal. The union said they will not be signing onto the settlement. They note they will continue to challenge the bill and work toward an acceptable resolution for Cranston.
Full details of the deal can be seen at: www.ripensioninfo.org.
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