Pension Settlement Set For Unveiling Wednesday; Deal Shrouded in Secrecy

Feb 10, 2014

State officials and the public-employee unions that sued over a 2011 overhaul of the state pension system have reached a settlement, yet the deal remains shrouded in secrecy in advance of its expected unveiling Wednesday afternoon.

Governor Lincoln Chafee and Treasurer Gina Raimondo briefed House Speaker Gordon Fox and Senate President Teresa Paiva Weed on highlights of the agreement during a closed-door Statehouse meeting Monday afternoon. Fox declined to offer any specifics after emerging from the meeting:

“We need to think about it," Fox said, as a gaggle of reporters trailed him and Paiva Weed. "Before you can even inform an opinion, I’m not going to come out of a meeting that’s been here for what two hours, or three hours almost, and say, here’s what I think.”

The Federal Mediation and Conciliation Service, which has overseen more than a year of closed-door talks in an attempt to resolve public-employee unions' challenge to the 2011 pension overhaul, has scheduled a news conference for Wednesday afternoon.

That will come hours after an expected vote on the settlement by the Employees Retirement System of Rhode Island, which manages the state pension plan. Yet it's not known if the vote by the ERSRI will be open to the public.  

Any settlement won't take effect unless it's approved by the General Assembly, and legislative leaders have previously reacted coolly to the idea of changing the 2011 pension overhaul.

Some lawmakers, mostly members of the tiny Republican minority, have argued it's wrong to mediate a constitutional issue for the state.

According to a statement from the Federal Mediation Conciliation Service: "At the joint request of attorneys for the State and for Rhode Island public employee unions, the Federal Mediation and Conciliation Service (FMCS) today announced that the parties will hold a press conference in Providence, RI on Wednesday, February 12 to report on the ongoing court-ordered mediation to resolve pension litigation."

Lawyers representing the unions, the governor's office, and the treasurer's office have met more than a dozen times since Superior Court Judge Sarah Taft-Carter ordered closed-door mediation in December 2012.

The pension overhaul was spearheaded by Raimondo, now a candidate for governor. It cut pension benefits, suspended cost of living adjustments and raised retirement ages for public employees. The unions called the change overly broad and unconstitutional, while Raimondo said they were necessary to ensure the sustainability of the $8 billion pension plan.

“Court-ordered mediation is a common, widely-used dispute resolution mechanism with a long track record of success in the United States,” John Arnold, Public Affairs Director of the Federal Mediation and Conciliation Service, said in a statement. “After more than a year, the parties are continuing to work cooperatively, and it is the appropriate time to update Rhode Islanders.”

This post has been updated.