Rhode Island Senate Majority Leader Dominick Ruggerio will introduce legislation to prohibit the use of retirement system funds to pay the state's legal cost in its defense of the unions' court challenge of pension-system changes enacted into law in 2011, or similar cases that may arise.
"It is a sad irony that, under current law, the state must use money from the pension system to defend the new law in court," said Ruggerio, D-Providence.
"That is essentially using future pensioners own money to fight against a suit they brought, and that's just not right or fair. Of course the state must pay its legal bills, but it should find the money elsewhere and not take it from the pension funds."
The legislation would add language to the law related to the restricted receipt account used to pay expenses of the retirement board and the cost of maintaining and administering the retirement system. The new language provides "that any litigation costs paid from the account shall be limited to defending those actions that arise as a result of decisions made by the retirement board."
The changes to the state employee pension systems, adopted in 2011, were a result of the Rhode Island Retirement Security Act and not as a direct result of any action by the retirement board, said Ruggerio.
According to one recent report, the cost of defending the General Assembly's pension changes hit nearly a half-million dollars by the end of 2013 — the bulk of the money for a law firm hired by the state and the remainder for actuarial consultants.
Two lawsuits challenging the new law have been merged into one in Rhode Island Superior Court, where Judge Sarah Taft-Carter has ordered closed-door negotiations in an attempt to reach a settlement.
