R.I.’s needed pension cuts pass legal test

IN RHODE ISLAND, a pension-reform plan hailed as a national model is being challenged as unconstitutional, says Harvard professor and Bloomberg News Columnist Noah Feldman. / COURTESY WIKIMEDIA COMMONS
IN RHODE ISLAND, a pension-reform plan hailed as a national model is being challenged as unconstitutional, says Harvard professor and Bloomberg News Columnist Noah Feldman. / COURTESY WIKIMEDIA COMMONS
BOSTON - From Athens to Rome to Providence, the painful truth about pensions is the same: Unfunded liabilities need to be reformed, and unions don’t like it. The difference: Europeans go to the streets when they are unhappy, and Americans go to the courts. In Rhode Island, a pension-reform plan hailed as a national model…
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2 COMMENTS

  1. Hi, John. I think the answer is yes – with conditions. All the legislature has to do is pass and/or repeal a law to repeal or void elements in a contract. That said; however, the decision to alter or pass a law must be on sound and valid reasoning. The reason the legislature made the change must pass legal scrutiny. If the reason the legislature changed the contract was not strong enough to cause the change, then that new law would be struck down because it wasn’t based on a real need. For example, if the legislature changed the pension because they thought it would attract yellow butterflies to the state, you can bet that the change would be struct down in court and the pension would be restored. In the case of Rhode Island, the state didn’t have enough revenue to sustain the original contract. That is considered a valid reason to alter the contract with the expectation that the system will now survive in the long run. Basically, you are allowed to correct fatal decisions, but not whimsical ones.