A federal agency postponed a planned Wednesday announcement on a possible settlement to the lawsuit challenging Rhode Island's 2011 pension overhaul law "as the parties continue to talk and work."
Rhode Island Superior Court Judge Sarah Taft-Carter set a Sept. 15 trial date at her Kent County courtroom in Warwick.
Federal Mediation and Conciliation Board director of public affairs John Arnold issued the statement early Wednesday morning, just as the parties appeared on the cusp of an agreement.
The federal agency, speaking before a meeting of the state retirement board, said attorneys for the state and Rhode Island's public employee unions and retirees had jointly requested the postponement.
"The parties remain under the court-mandated confidentiality order. Further updates as to scheduling will be available through FMCS, when appropriate," said the statement.
Five public-sector unions challenged Rhode Island's 2011 landmark law overhauling the pension system for state employees. Taft-Carter last year ordered mediation talks and issued a gag order.
"We are still under the confidentiality agreement," said Gov. Lincoln Chafee's communications director, Faye Zuckerman.
''It hasn't necessarily fallen apart. We're still working on it," General Treasurer Gina Raimondo told the Associated Press after Wednesday's closed-door meeting of the pension board. Raimondo, who chairs that board, acknowledged that talks went late into Tuesday night.
"It's not an unusual situation at all. Mediation does not impose a resolution, like a judge or an arbitrator. It is a process of negotiation, and that takes time," said Mineola, N.Y., attorney and St. John's University law professor Anthony Sabino. "It's in everyone's best interests to keep talking and work towards coming to terms both sides can agree to."
Rhode Island's far-reaching 2011 pension legislation triggered a favorable reaction in the credit markets. It created a hybrid plan merging conventional public defined-benefit pension plans with 401(k)-style defined contribution plans.
It also included a suspension of cost-of-living adjustment increases for retirees and raised the retirement age for employees not yet eligible for retirement.
Officials say the move will reduce Rhode Island's unfunded pension liability to $4.3 billion, a 41% reduction, and raise the funding level for its defined benefit plan to 59.8% from 48.4%.
Moody's Investors Service rates Rhode Island's general obligation bonds Aa2. Fitch Ratings and Standard & Poor's rate them AA.
Pension overhaul has become a hot-button financial and political talking point in the Ocean State, and nationally.
Moody's said last week that pension costs will spike for many municipalities this year.
According to Moody's, reported unfunded liabilities of the four largest public pension plans rose to $174 billion in 2012 from $34 billion in 2003, and to 135% of covered payroll from 33% over the same period.
In Rhode Island, three 2014 gubernatorial candidates -- Democrats Raimondo and Providence Mayor Angel Taveras, and Republican Cranston Mayor Allan Fung -- have pushed to overhaul pension benefit packages at their respective levels of government.
Chafee, elected as an independent and since turned Democrat, will not seek re-election.
Fung this week called on more openness from Chafee and Raimondo. "It's past time to let local officials in on the secret," Fung said in a statement.
A union-funded forensic report last fall by Benchmark Financial Services of Ocean Ridge, Fla., and the Rhode Island Council 94 of the American Federation of State, County and Municipal Employees called on federal securities regulators to investigate Raimondo's management of $7 billion in pension funds and said a "sinister pall of secrecy" surrounds Rhode Island's pension system.
Raimondo called the report "innuendo-filled."
A poll of 503 likely Democratic voters by Providence television station WPRI and the Providence Journal, released Wednesday, has Taveras leading at 31%, with Raimondo at 27% and businessman Clay Pell, who announced his candidacy two weeks ago, at 15%. The poll also has 25% of respondents undecided.
The primary will be Sept. 9.