PROVIDENCE – A settlement agreement between Central Falls and its retirees was approved Monday by U.S. Bankruptcy Court for the District of Rhode Island.
The agreement will cut more than $20 million in future pension payments to retirees, a news release said; 122 of 133 of the city’s retirees signed the agreement.
As part of the deal, the Chafee administration will advocate for a $2.6 million lump sum appropriation from the General Assembly to fund “transition payments” for five years.
During those five years, retirees would receive up to 25 percent less than they were receiving prior to the bankruptcy; when the “transition payments” stop, the retirees would receive up to 55 percent less.
Judge Bailey, in approving the motions, said the agreement would place the city on “substantially better footing” and will “advance the goal of a confirmation of a plan,” a news release said.
The Chafee administration also agreed to advocate that the Central Falls locally administered pension plan be moved into the MERS plan – the Municipal Employees Retirement System - for increased pension security.
On Monday, the bankruptcy court also approved agreements with the firefighters’ union, the policy union, and city workers represented by AFSCME Council 94.
As part of the pension restructuring for retirees, as well as active police and fire employees, the city will save more than $1 million annually in payments to fund pensions. It will cut the Central Falls’ unfunded pension liability by 49 percent to $23.9 million, the news release said.