Pension Settlement Appears Back on Track

Feb 12, 2014

State Treasurer Gina Raimondo during a 2011 pension meeting with state lawmakers
Credit Ian Donnis/File Photo / RIPR

Update: It looks like a settlement is back on; the federal mediation service plans to hold a news conference at 4:15 pm Friday.

A news conference to unveil a pension settlement Wednesday afternoon was abruptly postponed, although closed-door mediation in the case will continue. Meanwhile, the judge overseeing the dispute has also set a trial for September 15, in the event that a settlement can’t be reached.

The federal mediation service was expected to outline the settlement. Instead, the mediation service said the update has been indefinitely delayed. State Treasurer Gina Raimondo says she’s still hopeful a settlement can be finalized, according to her spokeswoman, Joy Fox.

"It hasn’t necessarily fallen apart," Raimondo said as she spoke with reporters in a video captured by the Providence Journal. "We’re still working on it. This process is too important to rush. We need to protect the interest of all the people of Rhode Island and make sure that this comes to a conclusion that protects the people and the pension system and protects all the taxpayers."

Clay Pell, part of the Democratic field for governor with Raimondo and Angel Taveras, reacted to the delay by calling on the parties in mediation to set a deadline for finishing their talks. In a statement, Pell said, “The secretive nature of this process has gone on for far too long. This ongoing uncertainty has been a disservice to taxpayers, state workers and retirees, and members of the General Assembly. For over a year, we’ve had mediation shrouded in secrecy. The ongoing uncertainty of this situation is one of the factors holding back our economy."

In a sign that a settlement may still be at hand, the state Retirement Board on Wednesday afternoon posted a meeting for Friday morning. The agenda items include possible approval of a proposed settlement.

Michael Yelnosky, dean-designate of Roger Williams University Law School, says he doesn't consider it unusual for Superior Court Judge Sarah Taft-Carter, who is overseeing the pension case, to set a trial date even as talks continue.

"It's not uncommon for settlement negotiations to be going on in cases that have trial dates set," Yelnosky tells RIPR. "Sometimes settlement negotiations take place very early on in a civil case, sometimes they take place very close to or even at the trial."

Yelnosky says it would be "reading tea leaves" to interpret Taft-Carter's scheduling of a trial date as an effort to put pressure on the parties to reach a settlement, "but I think that's a logical conclusion to come to, speculative though it may be. Because there hadn't been a trial date set before, something has changed as far as the judge is concerned, and it may be that the judge is signaling to the parties that if this settlement doesn't get worked out, we're headed to a trial; that this needs to get wrapped up or the case is going to be tried."

Yelnosky says the delayed announcement of a settlement "could be an indication that there's a serious snag, maybe one that's even a deal-breaker, and this could be an indication that there just a few more i's that need to be dotted and t's that need to be crossed. This happens in negotiations, that you think you've got a deal and you do in fact have a deal in principle, but when it comes time to reduce that deal to a writing that you'll be held accountable for, there are some things that you didn't anticipate that come up." 

Public-employee unions sued the state in response to a significant overhaul of the state pension system in 2011. A gag order imposed by the judge overseeing the case prohibits participants in the mediation from discussing it.

Meanwhile, Governor Lincoln Chafee gave a speech in Texas on Tuesday as speculation swirled about the elements of a possible pension settlement. The governor's public schedule listed no events for Tuesday.

This post has been updated.