Chafee says approving a pension settlement is mostly up to him and the General Assembly

Dec 24, 2012

As the two sides in Rhode Island's pension lawsuit prepare for court-ordered mediation next month, Governor Lincoln Chafee says the authority to approve a settlement rests largely with him and the General Assembly.

State Treasurer Gina Raimondo was the architect of the pension overhaul approved last year by the legislature and signed into law by Chafee. Like the governor, she is a defendant in the legal challenge brought against the overhaul by five public-sector unions.

Nonethless, when it comes to approving a possible settlement, "The general treasurer, technically, is a bystander," Chafee said in an interview last week.

As explained by the governor, negotiated changes to last year's pension overhaul would need to clear the General Assembly "and the governor has a veto option."

It's certainly conceivable that Raimondo could express objections to Superior Court Judge Sarah Taft-Carter if a proposed pension settlement doesn't meet her approval.

Like Chafee, Raimondo is an expected candidate for governor in 2014; the relative merits of a settlement -- and its impact on taxpayers and public-sector employees -- could become a big issue in the race.

Raimondo and the state's lead lawyer in the case, John Tarantino, declined comment on who has the authority to approve a pension settlement with the unions seeking to overturn the overhaul.

Raimondo said:

"The mediation is confidential, so I am not allowed to tak about it; no one is. We will be participating in good faith per the court order."

Chafee says he expects federally supervised  mediation talks on the pension case next month to focus on four areas: age of retirement; suspension of cost of living adjustments; the imposition of a hybrid-style retirement plan; and reamortization:

"We'll be addresing what can occur in any of those four areas, with the thought that ultimately this has got to be good for the taxpayers and it has to be approved by the General Assembly. That's the process and it's a good process."

Chafee declined to talk more specifically about what criteria he will use in assessing whether a proposed pension settlement is worth approving; Raimondo declined comment on that question. 

Asked if he would support a deal that preserves a certain percentage of the savings from the pension overhaul, Chafee declined to talk specific numbers.

But the governor says he doesn't think he'll leave himself open to charges of watering down the landmark pension overhaul or trying to rebuild his support among unions:

"I'm doing this as a governor who has to put together budgets .... if we're falling deeper and deeper into the hole by not putting money aside for the possible loss in court [in the pension case], that's not a good thing. I'd like to get this resolved on behalf of the taxpayers of Rhode Island. That's the smart course to take."

Raimondo, meanwhile, says politics can remain apart from the path of the pension case in court.  

"I am confident that the great work that led to this reform, that has made Rhode Island a national leader in this regard -- Rhode Island  is now known as the state who put politics aside to do the right thing for the people, and I think we're going to stay on that path."