RI Supreme Court Upholds State Retiree Pension Cuts

May 25, 2018

The Rhode Island Supreme Court has approved the cuts in state retiree pensions approved by the General Assembly seven years ago, in a decision released today.

The court ruled against a group of more than 100 retired public employees who took their legal case to the state’s highest court in their battle to overturn the changes designed to save taxpayers about $4 billion in unfunded pension liabilities.

State employees and retirees saw their retirement benefits and the age at which some could collect full pensions increased in several legislative initiatives between 2009 and 2011. Retirees were particularly angry about the decrease in the annual cost-of-living payments they once received.

Justices Paul Suttell, Francis Flaherty, Gilbert Indeglia and Maureen McKenna Goldberg voted to uphold a Superior Court decision by Judge Sarah Taft-Carter that declared the pension settlement, “fair, reasonable and adequate.”

Justice William Robinson did not participate in the decision.

The settlement was agreed to by unions representing public employees and the administration of then-Gov. Lincoln Chafee. The settlement was designed to soften the blow to retirees that came from the pension overhaul pushed by then-State Treasurer Gina Raimondo and signed into law by Chafee.

Writing for the court, Justice Indegila quoted former President Calvin Coolidge, saying, “economy is the method by which we prepare today to afford the improvements of tomorrow.”

“Rhode Island, unfortunately, failed to prepare for tomorrow. Its problems came to a breaking point in 2009, at the depth of the recession, at which time government officials realized they needed to address the depletion of funding in the state and municipal employee retirement systems.”

The retirees asserted that the state had broken its promises to fully fund their retirement benefits.