Raimondo Backs Possible Pension Settlement "On the Right Terms"

Mar 17, 2015

Credit Ian Donnis / RIPR

Governor Gina Raimondo on Tuesday said she'll continue to back a settlement to high-stakes pension litigation "on the right terms to the state."

As state treasurer, Raimondo spearheaded the 2011 overhaul of the state pension system that shaved about $4 billion from the state's long-term obligations., The savings were achieved by raising retirement ages, suspending cost of living adjustments and moving workers from a defined benefit plan to a hybrid defined contribution plan.

A series of public employee unions sued in response, charging it was unconstitutional to change benefits previously promised to workers.

More recently, Superior Court Judge Sarah Taft-Carter rejected requests by both sides for additional time to prepare for a trial. Taft-Carter preserved the start date of April 20 for the conflict.

The urgency of that timeline appears to have added impetus to settlement talks, with Taft-Carter bringing in former RI Supreme Court chief justice as a special master in the court case.

The Providence Journal's Katherine Gregg reports that at least one group of retirees will vote Monday on a proposed settlement.

On Tuesday night, the executive council of AFSCME's Council 94, the largest group of state employees, unanimously recommended that the union's approximately 6000 members approve the proposed settlement. Council 94 President Michael Downey pointed to the stakes in explaining why he backs a settlement.

"It could cost up to $4 billion," Downey said, "so I certainly would rather have this mediated settlement than a jury telling me that I’m getting nothing at all. That’s certainly a possibility."

Downey described the settlement offer as slightly better, although similar to the one rejected last year.

Raimondo, speaking with reporters outside her office Tuesday afternoon after an apparent stream of meetings, said she has remained consistent on her stance.

"I'm the same place I've always been," the governor said. "We had a good settlement before, and if we can settle essentially on those terms, we should go ahead and do that."

The governor said a gag order prevented her from discussing the terms of a possible settlement.

Last year, the smallest of a handful of union groups scrapped a proposed settlement by rejecting it. The deal would have preserved about 95 percent of the 2011 pension overhaul.

"We're going to trial in just a few weeks, so we are working furiously to make sure we're ready for trial," Raimondo said, "but at the same time, we're spending just as much time trying to settle. It's impossible to say whether or not we will. My job is to protect the state .... to protect the taxpayers and get a deal that is good for Rhode Island, so that's what we're going to do. We're going to be ready for trial when we need to be, but we're also hard at work trying to settle it in the mean time."

This post has been updated.