Rhode Island Superior Court Judge Sarah Taft-Carter signed off on a pension overhaul agreement between Providence and its police officers, firefighters and retirees that Mayor Angel Taveras said possibly saved the capital city from filing for bankruptcy.
Taft-Carter, who called the agreement "a laudable example" for other cities and towns, entered consent judgments on April 12 finalizing changes that cap all pensions at either 150% of the state median income or less than the salary of the current employee in the position.
Officials say the compromise saves Providence $18.5 million this fiscal year and reduces its unfunded pension liability by about $170 million, from $900 million.
"This is an historic day for the city of Providence," Taveras said.
Under the agreement, all cost of living adjustments, or COLAs, are suspended for 10 years.
After that, COLAs will only be reinstated for retirees who are under the pension cap, and COLAs will end when the cap is reached.
All 5% and 6% compounded COLAs are eliminated.
Future pensions will be calculated based on the four highest years of service. The current system calculates pensions based on the highest three years.
The deal switches retirees' health care plans to Medicare.