This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration. Need a new registration confirmation email? Click here
PROVIDENCE, R.I. (AP) a¿¿ Rhode Island state leaders and union officials announced a deal Friday that would end legal wrangling over a landmark pension overhaul that's been a model for other states seeking to rein in runaway pension costs.
The proposed settlement must win legislative approval and the endorsement of union members and retirees. But if enacted, the changes would retain the most significant portions of the 2011 pension overhaul, which raised retirement ages and suspended pension benefits to save billions of dollars in future costs.
"This is a very good deal for the people in the pension system and the people of Rhode Island," said Treasurer Gina Raimondo, a Democrat who crafted the original law and is now running for governor largely on her success in bringing the pension system in check. "I do hope other states follow our lead. We have shown that Rhode Islanders can come together and tackle big issues."
Rhode Island had one of the most troubled pension systems in the nation before lawmakers passed the sweeping changes during a special legislative session in 2011. The so-called Rhode Island Retirement Security Act was designed to save an estimated $4 billion for the economically troubled state over the next 20 years.
But many of the 66,000 state workers, teachers and municipal workers and retirees covered by the state retirement system complained that the changes amounted to broken promises and an unconstitutional change to their benefits. Their legal challenge has been the subject of closed-door settlement talks for more than a year.
The proposed settlement would give retirees a one-time 2 percent pension increase on the first $25,000 of their pension, and then increases of up to 3.5 percent every four years beginning in 2017.
The existing law suspended the increases for five years. Regular increases will return when the state's retirement fund is 80 percent funded. Currently it's roughly 60 percent funded.