PROVIDENCE – Providence police officers have approved the package of pension and retirement benefit changes agreed to with the city in May, clearing the way for its implementation. Police were the last group of rank-and-file municipal employees to ratify the landmark cost-cutting settlement.
The pact is projected to save the city $18.5 million during the current fiscal year and reduce the unfunded pension liability by at least $170 million.
It also should end a lawsuit filed by public employees over retiree health care benefits and expected challenges to pension changes passed by the City Council this year.
“Through collaboration, we have pulled Rhode Island’s capital city back from the brink of bankruptcy while sparing taxpayers the unnecessary expense of a long, costly legal challenge that threatened our future,” said Providence Mayor Angel Taveras in a news release.
Measures in the settlement with police include:
A 10-year suspension of annual cost-of-living pension increases with future reinstatement only for retirees making less than 150 percent of the state median income or salary of current corresponding employee.
A 3 percent cap on future cost-of-living increases.
A one-time $1,500 stipend in fiscal 2017 for retirees with annual pensions of less than $100,000.
Another $1,500 stipend in fiscal 2020 if savings are achieved through a self-insured dental plan.
Future pensions set by four highest years of earnings instead of three.