Policy: Entitlements

RI pension deal announcement postponed

News,Business,Rhode Island,Entitlements,Pensions

WARWICK, R.I. (AP) — A federal mediation agency on Wednesday indefinitely postponed an announcement of a proposed settlement of a legal challenge to Rhode Island's landmark 2011 pension overhaul, leading to questions about the status of the deal.

The Federal Mediation and Conciliation Service had scheduled a news conference for Wednesday afternoon to announce the settlement, but it said shortly before 5:30 a.m. that the event had been postponed at the request of lawyers for the state and state employee unions and retirees.

The only reason given for cancelling the event was that the parties were continuing to talk and work with federal mediators.

"The parties remain under the court-mandated confidentiality order. Further updates as to scheduling will be available through FMCS, when appropriate," the mediation agency said in a statement.

"We are still in process," General Treasurer Gina Raimondo said as the board of the state's Employees' Retirement System prepared to meet Wednesday morning. "We worked late into the night. This is too important to rush. We have to get it right."

The board, which had been scheduled to review and possibly vote on the settlement proposal, instead met in executive session to discuss the litigation.

A spokeswoman for Gov. Lincoln Chafee said she couldn't comment about the negotiations or the announcement being postponed, citing a court-imposed gag order.

Word emerged Monday of the proposed settlement to end the legal challenge to the state pension overhaul. No details were released publicly, but the governor and general treasurer briefed legislative leaders that afternoon.

The General Assembly must approve any deal. A spokesman for House Speaker Gordon Fox said he had just heard about the delay and had no immediate comment . A message left Wednesday morning for a spokesman for Senate President Teresa Paiva Weed was not immediately returned.

Rhode Island had one of the worst-funded pension systems in the nation before legislators passed the 2011 law, which raised retirement ages, suspended pension increases and made other changes to save billions of dollars in future pension costs. It has served as a model for lawmakers in other states looking to rein in their pension systems.

Public-sector unions and retirees argued the changes were unfair and sued to block the law. The lawsuit has been the subject of closed-door mediation since 2012. The legal fight has been closely watched by unions, state officials and financial analysts around the country.

Any deal could significantly change the state's public retirement system and increase pension costs by millions of dollars every year. Lawmakers have expressed frustration about how the fate of the law — passed after months of public hearings and debates — was being decided in closed-door negotiations.

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