R.I. Proposes New Settlement of Pension Reform Suit

The state of Rhode Island has made a new proposal for a settlement of litigation brought by unions and retirees over changes to state employee pension benefits.

According to the Providence Journal, the suggested terms of the settlement include:

• Two, one-time $500 stipends to current retirees, with the first payment a month after enactment, and the second paid a year later;
• A once-every-four years increase in the pensions paid to current retirees on their first $30,000 in retirement benefits, as opposed to the first $25,000; and
• A tweak in the retirement age to allow workers to retire with full benefits at age 65 after 30 years of service; age 64 (31 years): age 63 (32 years) and age 62 (33 years).

Also under discussion is a proposal to allow police officers and firefighters to retire with full benefits at age 50, after 25 years of service, and at any age, after 27 years of service. 

Unions and some union members will vote on whether to agree to the settlement.

The latest round of pension reform in Rhode Island, passed in November 2011, sparked several lawsuits by both unions and retirees. A settlement agreement on the lawsuits was reached last year, but police union members rejected the deal, prompting the judge to order the parties back to mediation.

Meanwhile, a Rhode Island state court denied the state’s motion to dismiss the challenge, rejecting the state’s argument that no contractual relationship existed between it and the plaintiffs at the time the pension reform was enacted.