RI Public Employee Unions Fight Cutbacks in Court

May 17, 2010 (PLANSPONSOR.com) – A coalition of Rhode Island public employee unions has gone to court to challenge state benefit cutbacks.

A news report from the Providence Journal said the eight unions argued the benefit cutbacks represent an unconstitutional governmental taking of property.   The lawsuit argues the changes “substantially altered the standards for retirement” for vested employees with at least 10 years of service, resulting in “their substantial injury.”

The unions want lost benefits to be restored.

The Journal reported that the changes raised the minimum retirement age from 59 to 62 and reduced the multiplier used to calculate pension benefits, The changes also replaced what for some had been a 3% compounded cost-of-living adjustment with increases based on the Consumer Price Index and capped at 3%. The changes affect about 20,000 teachers and state employees who were not eligible for retirement as of September 30, 2009.

The lawsuit, filed Wednesday in Superior Court , comes as lawmakers are considering what would be a third round of reductions of benefits for future retirees, following those adopted last year and others adopted in 2005, the newspaper reported.