Rhode Island Superior Court Judge Sarah Taft-Carter on Thursday approved a compromise to settle most of the legal challenges by public-sector unions to the state's landmark 2011 law that overhauled pension benefits for state employees.
"Today, we have an agreement," Gov. Gina Raimondo told reporters at a late-afternoon briefing in Providence. "There's work to be done, but now we're in the implementation phase."
Former state Supreme Court Chief Justice Frank Williams, whom Taft-Carter appointed special master with the authority to mediate a deal, unveiled the final deal in court Thursday. He said it would end all but three of the numerous challenges.
The holdouts are an umbrella police union and police and fire unions from Cranston.
"The three just represent a tiny fraction of the plaintiffs," said Raimondo. "We've restructured the package so the pensions will be there for people."
Taft-Carter vacated the scheduled April 20 starting date for a trial. Speaking from her Providence courtroom, however, she added that the trial could resume in June if settlement implementation fails. Taft-Carter gave both sides until May 18, when she has scheduled a status conference.
"We believe the state had a strong case at trial, but a trial would have prolonged the uncertainty," said Raimondo.
State lawmakers and, ultimately Taft-Carter again, must approve the deal. The May 18 deadline does not apply to the General Assembly.
General Treasurer Seth Magaziner said the settlement is vital to boosting Rhode Island's bond rating.
"The rating agencies constantly cite the uncertainty as to why our credit rating is below average," he said.
Moody's Investors Service rates Rhode Island's general obligation bonds Aa2. Fitch Ratings and Standard & Poor's rate them AA.
According to Raimondo, the settlement preserves more than 90% of the savings projected from the legislation. State officials said at the time that Rhode Island expected to reduce its unfunded liability from $4.4 billion to $2.7 billion, and lower its annual contribution from $305 million to $177 million.
A settlement announced in February 2014 stalled when a police union rejected it.
Tweaks in the final offer included changes to the minimum retirement age, an increase in the defined-benefit pensions available to public employees with service of 20 or more, and possibly more frequent cost-of-living-adjustment increases for retirees.
Raimondo, then treasurer, in 2011 ran point for the overhaul law, which passed amid headed lawmaker debate. Then-Gov. Lincoln Chafee signed the measure late in the year. She and Magaziner because governor and treasurer, respectively, in January.
Taft-Carter last month issued a gag order as negotiations intensified. Unions have been voting over the past two weeks on the state's final offer.
