Ruling Gives a Boost to Rhode Island Unions' Pension Efforts

Rhode Island’s retirement system is essentially “an implied contract” between the state and its employees, a judge said Tuesday in a ruling that favored the Ocean State’s pension workers.

Sarah Taft-Carter’s ruling in Superior Court allowed eight public employee unions to go ahead with a lawsuit seeking to block pension reductions.

“Case law does not preclude but rather supports this court’s holding that [the] plaintiffs, as 10-year veterans of the state, possess a contractual relationship with the state pertaining to retirement allowances and [cost-of-living adjustment] benefits which are not subject to collective bargaining,” Taft-Carter wrote.

The latest development is expected to further complicate heated debate in Rhode Island, where a special legislative session is scheduled next month to discuss pension overhaul.

Gov. Lincoln Chafee and Treasurer Gina Raimondo said in a joint statement that the state would seek immediate state Supreme Court review.

“Today’s lower court ruling recognized this is only the beginning of what could be a long legal process,” they said. “The state cannot afford its current pension obligations and must enact reform that is fair to the taxpayers and provides retirement security to retirees and active employees that is sustainable and affordable.”

In May, Raimondo issued a report saying the annual cost of Rhode Island’s pension fund could skyrocket to $1 billion by fiscal 2022 and that the retirement plan for state employees and teachers could run out of assets between 2019 and 2023.

Central Falls filed for Chapter 9 bankruptcy protection on Aug. 1. The city of 18,000 faces an $80 million pension deficit. Central Falls receiver Robert Flanders has ordered up to a 55% cut in police and fire pension benefits.

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