Pension settlement details revealed

GOV. GINA M. RAIMONDO previously has said that the pension settlement preserves more than 90 percent of savings to taxpayers.  / PBN FILE PHOTO/MICHAEL SALERNO
GOV. GINA M. RAIMONDO previously has said that the pension settlement preserves more than 90 percent of savings to taxpayers. / PBN FILE PHOTO/MICHAEL SALERNO

PROVIDENCE – Pension settlement agreement details were released today, after weeks of a court-imposed gag order kept the specifics of the agreement largely secret.

The filing features cost of living adjustments and other payments, including a one-time 2 percent cost of living adjustment for participants or beneficiaries of participants who retired on or before June 30, 2012. It will be applied to the first $25,000 of their pension benefit.

For all current and future retirees, annual cost of living adjustments will be applied when their plan funding reaches 80 percent as outlined in the Rhode Island Retirement Security Act. For employees under the municipal employees’ retirement system, each unit will be separately evaluated. Funds that have not reached the 80 percent threshold will receive a COLA calculation and payment every four years until the 80 percent funding is reached.

Retirees who are in plans that are more than 80 percent funded, including participants who retire after June 30, will have COLAs calculated on the first $25,000 of the benefit. For participants and/or beneficiaries of participants who retired on or before June 30, the $25,000 COLA cap will be increased to $30,000 for any COLA payable in plans with less than 80 percent funding, according to the agreement.

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Participants and/or beneficiaries of participants who have retired on or before July 1 also will receive a one-time $500 stipend within 60 days of July 1, and a second one-time $500 stipend next year.

A majority of public-employee unions approved the pension deal earlier this month. The groups had challenged Rhode Island’s pension overhaul in 2011, which suspended cost-of-living increases.
Legislators reduced future retirement benefits to save approximately $4 billion from a shortfall in the state’s pension fund, prompting a lawsuit, which was joined with previous lawsuits for pension changes made under the Gov. Donald L. Carcieri administration.
Gov. Gina M. Raimondo previously said that the settlement preserves more than 90 percent of the savings to taxpayers.
The pension reform lawsuit was scheduled to go to trial April 20. Public employee groups and the state had sought a delay, but the state Supreme Court rejected their appeal. The court date has been vacated for the purpose of implementing the settlement.
The settlement now moves forward to the General Assembly for approval.

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