The state retirement board voted in closed session Friday afternoon to approve a proposed pension settlement. The board met in executive session for nearly an hour, ending in a vote of 6 – 1, with 5 abstentions.
Dan Beardsley, Executive Director of Rhode Island League of Cities and Towns, cast the lone “nay” vote. Cranston Mayor Allan Fung was at the board meeting, and after the vote was announced he called Beardsley’s lack of support for the proposed plan a bad sign for taxpayers. “Which indicates to me that there is going to be cost that’s going to be passed back on to the taxpayers at the local level and to the state, which is a big concern,” said Fung.
Gov. Lincoln Chafee said he was pleased with the vote. So was state treasurer Gina Raimondo, “I’m very pleased that the retirement board voted overwhelmingly to approve the settlement agreement,” said Raimondo. “I’m pleased that the process is coming to an end, and I’m very relieved to be able to talk publicly about it.”
The proposed pension settlement ends more than a year of mediation after public sector unions and retirees challenged the 2011 pension law that raised the retirement age and suspended cost of living adjustments.
Pension Settlement Details Emerge
A proposed settlement unveiled Friday would preserve most of the savings from a 2011 pension overhaul while giving modestly better benefits to public employees. But the deal won’t become effective unless it clears a number of hurdles.
The settlement would cost cities and towns and the state a combined increase of $24 million just in fiscal year 2016. But the deal would preserve almost $4 billion in savings from the 2011 pension overhaul.
State Treasurer Gina Raimondo was the architect of that overhaul, and she joined Gov. Lincoln Chafee in saying compromise is better than the possibility of losing the pension case in court.
“At the end of the day we need to find solutions, and what I’ve said from day one – this is math, not politics – and this is about securing our future,” said Raimondo. “This is a very good deal for the people in the pension system and the people of Rhode Island.”
The settlement faces a series of union votes and has to be approved by the General Assembly to become effective. Cranston Mayor Allan Fung, a Republican candidate for governor, said it would be better to keep fighting the pension case in court rather than increasing expenses for taxpayers.
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