PROVIDENCE, R.I. (WPRI) – Nearly four years after passing sweeping reforms to the state pension system, lawmakers were back at it again Monday.
Legislators officially tackled the proposed pension reform settlement for the first time in a rare Monday hearing before the Senate Finance Committee.
Seven members of the committee – chaired by state Sen. Daniel DaPonte, D-East Providence – heard testimony from key players in the settlement, which was crafted during months of closed-door talks between state and union representatives.
The tentative settlement – which would end a union lawsuit against the 2011 pension overhaul – would save taxpayers roughly $4 billion by allowing the state to reduce workers’ retirement benefits. In exchange, taxpayers would accept about $290 million getting added to the current pension shortfall to pay for restoring some benefits to retirees.
R.I. Superior Court Associate Justice Sarah Taft-Carter is expected to grant final approval to the settlement, which was passed by a majority of union and retiree groups last month, after holding a so-called “fairness hearing” that ended last week. After that, approval by lawmakers and then the governor would be the final steps for the settlement to take effect.
DaPonte said he does not expect the committee to vote on the settlement by the time lawmakers’ revised budget is released by the House Finance Committee next week. He said it could always be inserted down the road.
“We’re still waiting on a determination on the fairness hearing,” DaPonte said. “Depending on when that ultimately happens will determine whether it is in the budget or done as a separate bill.”
Speaking at Monday’s hearing, former R.I. Supreme Court Chief Justice Frank Williams lauded lawyers from both the state and the unions for working together to come to a resolution. He urged the committee to accept it, “for the self-esteem of Rhode Island.”
Those who’d been poised to battle it out on both sides of the lawsuit – including John Tarantino, the lead attorney for the state, and Robert Walsh, executive director of the National Education Association Rhode Island teacher’s union – urged the committee to approve the settlement.
General Treasurer Seth Magaziner, whose office helped craft the settlement, said the deal would lock in about 92% of the savings from the 2011 pension overhaul, which was championed by his predecessor, now-Gov. Gina Raimondo.
“In the 2017 fiscal year alone, taxpayers will save nearly $400 million under this deal compared to what the cost would have been before the 2011 reform,” Magaziner said in his prepared testimony.
At the start of the hearing, only one person had signed up to testify in opposition of the bill: state worker Elizabeth Del Padre, who said it’s unfair to allow those employees who are further away from retirement to return to the defined benefit plan while forcing workers closest to retirement to remain in a hybrid system that includes a 401k-style benefit.
“I as an attorney believe settlements work, but this settlement I feel is substantively unfair,” Del Padre said.
The House Finance Committee is scheduled to take up the settlement in its own hearing on Wednesday. Judge Taft-Carter’s decision on whether to approve the deal is expected soon.
While almost all the workers and retirees affected by the pension law have agreed to settle, there are a few holdouts: active police officers in the state-run pension system, and the police and fire unions in Cranston. While it’s possible they could also eventually decide to join the settlement, for now their cases are scheduled to resume this month.
Those three groups of holdouts only account for about 733 workers combined, while the groups that have agreed to settle represent roughly 58,901 workers and retirees, Williams told the judge earlier this spring.
Ted Nesi contributed to this report.