RI retirees OK pension settlement overwhelmingly

All voting on deal to end high-stakes lawsuit must be done by Friday

Thousands of retired state workers line up at Twin River to vote on a proposed pension settlement. (Photo: Ted Nesi / WPRI 12)

LINCOLN, R.I. (WPRI) – Rhode Island public-sector retirees who showed up for a vote Monday at Twin River Casino gave overwhelming approval to a proposed settlement that would end their lawsuit against the state’s 2011 pension overhaul.

At stake in the suit is whether Rhode Island legislators acted constitutionally three years ago when they reduced future retirement benefits to shave roughly $4 billion off the shortfall in the state’s pension fund for government workers and taxpayers.

While Monday’s voting results were not officially disclosed due to a judicial gag order, multiple retirees leaving the closed-door meeting said the final tally on the settlement was 1,168 in favor, 332 against; only a small percentage of the state’s retirees actually cast a ballot.

The retirees’ vote is far from the end of the process. For one thing, current workers are still voting on the settlement and will continue to do so until the deadline on Friday. And even if all of them agree to settle – which is no sure thing – the deal would then have to be approved first by a judge and then by the General Assembly to avoid a trial.

The cost of the deal to taxpayers has not been disclosed.

Many of the retirees who voted yes on Monday said afterwards they did so with heavy hearts, believing state leaders acted unfairly by cutting the payments they were promised during years of service to the government.

Retirees arrive at Twin River Casino ahead of the pension overhaul vote. (Ted Nesi/WPRI)
Retirees arrive at Twin River Casino ahead of the pension overhaul vote. (Ted Nesi/WPRI)

One retiree, who declined to give her name, spoke for many when she said she voted yes to end the uncertainty and to pocket the small benefit increases on offer in the settlement. “You’re damned if you do and damned if you don’t,” she said. “I thought, a bird in the hand is worth two in the bush.”

“I am just so heartbroken that this can happen to people, because it’s morally wrong,” said Carol Orecchio, a retired East Providence teacher who voted no. She harshly criticized Gov. Gina Raimondo, the architect of the law, for her role in it.

The settlement came together quickly in recent weeks under the direction of former R.I. Supreme Court Chief Justice Frank Williams. The process sped up after a judge refused to delay the trial’s start past next month.

Williams, who addressed the retirees before they voted Monday, declined to comment on the situation afterwards, citing the judicial gag order in the case. But multiple retirees said his message to them was blunt: they should take this deal, because their side is highly likely to lose either before a jury in R.I. Superior Court or on appeal before the R.I. Supreme Court.

According to a document provided to the retirees on Monday, the new settlement terms they’ve been offered largely mirror what they would have received under a settlement rejected last year, except for two changes.

First, cost-of-living adjustments (COLAs) would be calculated on the first $30,000 of a retiree’s pension if he or she retired before the settlement takes effect, instead of on the first $25,000 as called for currently. Second, those who are already retired when the deal takes effect would receive two one-time payments of $500 each over the next two years.

“We recognize you deserve more,” lawyers for the retirees wrote in the summary. “However, we also firmly believe that this settlement presents the best option available to you. This is the last realistic opportunity for a meaningful, positive settlement of these lawsuits.”

General Treasurer Seth Magaziner said last week that even if the unions and retirees won the lawsuit, the state would just have to seek a new settlement with them because taxpayers can’t afford the cost of the original pension system.

The pension law was largely designed by Governor Raimondo when she was serving as treasurer. It saved billions of dollars by taking a number of unprecedented steps, most notably freezing cost-of-living adjustments for retirees, and has drawn national attention since the General Assembly gave it overwhelming approval in November 2011.

A group of 205 union and retiree plaintiffs filed suit to overturn the pension law in June 2012. The two sides went on to reach a proposed settlement after more than a year of closed-door negotiations, but that deal was scuttled by a small group of police officers in April 2014, which put the conflict back in court.

R.I. Superior Court Judge Sarah Taft-Carter, who is overseeing the case, at first set a Sept. 15, 2014, trial date for the case but scrapped it as the sides got tied up in pretrial matters. She has since set an April 20 start date for the trial and agreed to the state’s request for a jury to hear the case.

It’s highly likely the outcome in Superior Court will be appealed to the R.I. Supreme Court no matter which side wins – unless the case is settled outside of court.

With no final settlement yet, though, the pension case is grinding on in court. Lawyers on both sides are scheduled to appear before Taft-Carter on Thursday morning in Newport County Superior Court to tackle dispositive motions.

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com and writes the Nesi’s Notes blog. Follow him on Twitter: @tednesi

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