Rhode Island has been entangled in legal battles since the state signed its sweeping pension reform bill into law in 2011. But a new proposal may bring an end to the legal challenges mounted against the law once and for all, and in the process soften some of the law’s strongest provisions.
The 2011 law, titled the Rhode Island Retirement Security Act, aimed to curb the state’s pension costs by $4 billion over 20 years. It did so by raising retirement ages for most workers, suspending COLAs for retirees, and shifting workers into a new 401(k)-type retirement plan.
The settlement would keep in place most of the 2011 law. But it would also bring some key changes, as outlined by the New Haven Register:
The settlement would give cost-of-living increases to retired government workers sooner than the current law would allow. It calls for a one-time 2 percent cost-of-living pension increase once the settlement is enacted by lawmakers. Additional increases would come in 2017, and every four years thereafter until the pension fund is 80 percent funded.
The existing law calls for limited increases every five years until the 80 percent funding level is reached. The fund is now about 60 percent funded.
The settlement would also call on public workers to contribute slightly more toward their own retirement benefits.
The proposed changed would cost Rhode Island $13 million and the state’s towns and cities $11 million, and would raise the state’s unfunded liabilities from $4.8 billion to $5 billion.
The proposal must now pass through a series of votes by union members, a judge in the state Superior Court, the systems retirees and finally by state lawmakers.