(Updated 6:15 p.m. and 8:25 a.m.)
PROVIDENCE – Gov. Gina M. Raimondo on Thursday said a settlement agreement has been approved by a majority of public-employee groups that had challenged Rhode Island’s overhaul of state pensions, presenting a potential end to litigation that has shadowed the state for six years.
The settlement presents a much more certain outcome for Rhode Islanders, Raimondo said, speaking briefly at a press conference at the state Department of Administration.
“I am looking forward … to moving forward to securing Rhode Island’s future and to secure the retirement of tens of thousands of public employees,” she said. Taking the litigation risk off the table is the right thing to do, she said.
“The settlement preserves over 90 percent of the savings” to taxpayers, she said.
The proposed agreement, which would have to be approved by both the court system and the General Assembly, would effect about 60,000 public employees and retirees, according to the governor.
Unlike last year when a proposed settlement was scuttled, all union groups were not required to sign on to the deal announced Thursday.
All but three union groups, representing 700-800 people, have approved the latest settlement. Those groups include municipal police, Cranston police and firefighters. For those groups, their individual lawsuits will continue, said Mark Dingley, special counsel to the governor.
For the state, any financial changes posed by the settlement agreement will not take effect until 2017.
The settlement-agreement document will be made public on April 13 and will be introduced simultaneously with legislation presented to the General Assembly.
Under the agreement, all current retirees in groups that approved the settlement would receive two one-time $500 stipends. One payment would come the month following enactment, another would come a year later.
For current employees a $25,000 cost-of-living allowance cap would be increased to $30,000.
The plan would also allow current and future state workers, teachers and other employees to retire with full benefits after reaching age 65, with 30 years of service, or at younger ages, as long as the combination of the age and years of experience add up to the sum of 95.
Senate President M. Teresa Paiva Weed said in a statement, “I welcome the news that a potential settlement has been reached in the pension suit. I believe a settlement of pending litigation is in the best interest of all Rhode Islanders. It brings closure and finality for retirees and public employees and fiscal certainty to the state. I am grateful to the employees and to Chief Justice Williams for working together on this settlement proposal. I know this has been difficult for everyone involved. In the weeks ahead, the Senate Finance Committee and all the members of the Senate will be reviewing the proposed settlement and taking public testimony on the legislation required to implement the agreement.”
House Speaker Nicholas A. Mattiello also said he is pleased that the parties reached a settlement.
“I am aware of the general terms of the settlement and I believe they are in the best interests of all, but I haven’t had the opportunity to review the specifics and I reserve the right to do so. The House of Representatives will conduct its due diligence as part of the legislative process and we have established no timetable at this point,” he said.
The 2011 pension overhaul included the suspension of annual cost-of-living increases. Legislators reduced future retirement benefits to save approximately $4 billion from a shortfall in the state’s pension fund, prompting a lawsuit, which was joined with previous lawsuits for pension changes made under the Donald L. Carcieri administration.
The pension reform lawsuit was scheduled to go to trial April 20. Public employee groups and the state had sought a delay, but the state Supreme Court rejected their appeal. The court date has been vacated for the purpose of implementing the settlement.
(Updated 6:15 p.m. and 8:25 a.m.)