RI pension settlement press conference now set for Friday

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By Ted Nesi

PROVIDENCE, R.I. (WPRI) – It looks like the much-anticipated pension settlement may be back on track.

At least for now.

The U.S. Federal Mediation and Conciliation Service (FMCS), which is handling the talks between the state and the unions in the pension suit, sent a new media advisory midday Thursday announcing that a press conference will be held Friday, Feb. 14 at 4:15 p.m. in the Department of Administration building in Providence “to report on the ongoing court-ordered mediation to resolve pension litigation.”

The FMCS said the Valentine’s Day press conference is being called at “the joint request of attorneys for the state and for Rhode Island public employee unions and retirees.” The timing means the announcement is now set to happen late in the afternoon on the Friday before a long weekend.

It’s the latest twist during a surprisingly dramatic week on the pension front, which kicked off Monday when the FMCS scheduled a press conference for Wednesday to announce a settlement and senior lawmakers were briefed about the proposal.

But the settlement apparently hit an undisclosed snag sometime on Tuesday, because early Wednesday morning the FMCS abruptly cancelled the press conference without explanation. R.I. Superior Court Judge Sarah Taft-Carter then moved to set a Sept. 15 start date for the pension lawsuit to go to trial.

The announcement of Friday’s press conference is the second sign a settlement may be back on track after a shambolic couple of days. The first came midday Wednesday, when the State Retirement Board scheduled a special meeting for Friday at 1 p.m. to discuss and possibly approve a “proposed settlement,” according to its agenda; that action had originally been expected Wednesday morning before an unexplained change of plans.

“There is no agreement now,” Treasurer Gina Raimondo told reporters Wednesday after the Retirement Board meeting. “We’re going to keep working.”

J. Michael Downey, president of Rhode Island’s largest public-employees union, Council 94, told his members in a message sent after Wednesday morning’s events: “While the trial is scheduled to begin in September, I wanted you to know that the court-ordered mediation process is continuing today as both sides work towards a settlement agreement. The court-mandated confidentiality order remains in place.”

House Speaker Gordon Fox and Senate President M. Teresa Paiva Weed, who were briefed Monday afternoon about the potential pension settlement, declined to provide details when they left the governor’s office. Lawmakers, who aren’t involved in the settlement talks but will need to approve any deal, have expressed serious reservations about taking up the pension issue once again.

Fox said Wednesday there’s no guarantee the General Assembly will vote on a proposed settlement. “I reserve the right to recommend, if I think that it’s not fair or it creates too many problems, to say that, no, I don’t think we should take this up,” he said, adding: “I’m not leaning either way. I’m letting the process take its course.”

The pension reform law passed in 2011 slashed Rhode Island’s unfunded pension liability from $7.3 billion to $4.3 billion, mainly by freezing pensioners’ annual cost-of-living adjustments (COLAs) for two decades. The law also moved most workers into a new hybrid pension plan that combines a smaller defined benefit with a 401k-style defined-contribution account, raised the minimum retirement age and tied COLAs to the pension fund’s investment returns.

Unions filed suit, claiming the law was unconstitutional, which led Judge Taft-Carter to order the closed-door talks more than a year ago. She also issued the gag order, which has blocked the two sides from discussing anything publicly.

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

23 thoughts on “RI pension settlement press conference now set for Friday

  1. It’s not a three day weekend for state employees. State employees don’t get Presidents Day off and will be working on Monday.

  2. The public thinks we all get thousands each year. So not true. A lot of us were counting on that cola. Not fair state workers have to bare the brunt of the deficit problem.

    • To call it a COLA is incorrect. It was an automatic 3% raise. If it was linked to true COLA’s,such as Social Security increases,the problem would not have been so severe.

      • You’re right Bob, it’s not a true COLA. If it were an actual COLA like Social Security, it would be much higher. The average Social Security COLA since the programs inception (1975-2013) is over 4%.

        You really should do a little homework before you post inaccurate statements in an attempt to bolster your argument.

  3. If it was court ordered arbitration to come to a settlement. Then isn’t it a court ordered settlement? In which case why do the lawmakers (general Assembly) have to approve the settlement? And if in fact, they do, what will keep them from deciding at a future date not to honor the settlement or to modify it? If they unconstitutionally made a law with pension reform when legally they should not have,then they are not honorable. I don’t see how they could ever be trusted to be law abiding representatives for the people of Rhode Island. With this settlement, providing it isn’t of wastepaper quality, I do hope there are provisions to protect the integrity of the settlement. However, if they don’t adhere to the guidelines that the Rhode Island Constitution has in place, what makes anyone think they will adhere to the parameters of a settlement document?
    This is like a divorce, only in this case it’s between the lawmakers, those involved in the pension reform and the state retirement members and retirees. There is a loss of trust that can never be restored in the relationship. We have no choice, but to vote them all out. The state retirement members and retirees have sacrificed and paid a price. Now it’s time for the lawmakers and those involved in the pension reform to do so. I guess this was important enough to them to risk their positions.

  4. Unions are for the weak and ignorant. I don’t feel an ounce of sympathy for any of them! @Dave-You proved yourself to be a pansy with your “not fair” comment. GROW UP AND MAN UP!

    • Look at you, so grown up, yet still with the name calling eh? Maybe you’re not the grownup you think you are. And I’ve got news for you, you can keep your sympathy, no one asked for it, and no one needs it.

  5. Janri, this court is just a steppingstone to the RI supreme court. Because of separation of powers, the GA doesn’t have to do what THIS court says. The supreme court is a different story. Then the state would have to hold a constitutional convention to overturn the RISC.

  6. The Judge ruled that the state employees retirement is base on an implied contract. So the law that GA is trying to defend is illegal. Why do they get to approve anything.

  7. Its too bad that most people do not know the truth behind the State Pensions. Most react to what they have heard by shock jocks and others. Most pensions in RI are around 20-24 thousand. Also, what people are not told is that the retirees had no choice in what contribution they had to make. In my case it was 9%, and that was before paying into SS and everything else. I also paid into a 401k plan. I would love to see what would happen to a retired person who’s money was in a 401k, planning on matching funds from their employer to retire and then learn that their employer never put in the money that they were promised. Or that the investments tanked and they lost all of their 401 money. Or better yet how about if the 2000 a month that they had planned on from SS was suddenly dropped to 1000. Very hard to get a meaningful job when you are 65 years old!

  8. Well said T Jones, the facts are most certainly not out about pensions. Most pensioners do not get social security and therefore the only income they have is a pension. Imagine paying into a pension for 35-40 years then finding out that it was only worth 20-25k a year….. This is fact by the way plus with no adjustment for inflation retirees will be below the poverty level. That will be a real economy stimulator. Let me also point out how just a few reasons why we got into this mess. One, those who remember DEPCO may have forgotten how the State paid back the RI public…..they took it from the pension fund and never paid it back. How about the judges….they are exempt from the pension changes, get 100% of their salary WITH a 3% COLA. Then there are some legislators who served just 2 terms and are getting a pension with FREE health insurance. So the legislators and judges get there pension which by the way in most cases they did not contribute to. Does this seem fair? Especially if you were the one who contributed for 30 years. And THIS IS fact. Typical corrupt RI……

  9. Tom Jones & Bob Springer –

    Well said. The historical aspects of this are always interesting.

    So, DEPCO didn’t repay the pension system? That I and of itself is grist for the schock jocks.

    But they’d rather take the easy way out by sticking to the talking points handed them by their political keepers and make this about ‘taxpayers vs. evil, bad, retirees’.

    This seems more about the usual RI suspects, ENRON, NYC ex-mayors, and Wall Street using its political proxies to raid the till.

    Yet again. And as with every single Constructed Fraud, there’s always a scapegoat, in this case those ‘bad, bad, retirees’.

    Too bad they tried this 20th century trick in our 21st century Net-centric era in which citizens use the reach and power of the Net to get at the truth.

  10. As a small business owner I have to pay my own way with everything – no pension, no benefit and healthcare package, no sick-vacation-personal time off – I have NO sympathy for state workers – you guys are the only ones in this state that are doing well and your jobs are protected by the unions. My taxes are through the roof to support all of this – I know we will vote back in all democrats to keep this regime going in this state. I mean how bad do things have to get in order to make a change here??

    • Sue –

      Are you aware that state workers pay their own way as well? They are required to pay nine percent of their earnings into the state pension fund.

      It does not matter if they want to, they must. It does not matter how many retirement plans of their own they establish, the state still mandates they pay nine percent of their wages to the state fund.

      This is not about your taxes going thru the roof. If you believe that, please cite the figures, specifically the percentage of your state taxes which are directly tied to retiree COLAS.

      Are you aware that the figures cited to get this ‘reform’ slicked past the taxpayers have now been revealed as false, according to Ted Siedle of Forbes – not exactly a union magazine?

      Are you aware that a false paradigm was set up by the ENRON/NYC mayoral/wall street claque to pit ‘taxpayers’ against ‘evil, bad retirees’?

      If you don’t mind being played by cynics who schemed to profit at your and everyone else’s expense, then by all means, you’re free to believe as you do.

      Are you aware that the so-called ‘savings’ from unlawfully withholding contractually owed COLAs from retirees were just a ploy, that those funds along with others were handed to wall street hedge fund cronies? Are you aware those hedge funds will neither account for their investments nor return them, and that by various reports, they’ve ‘lost’ two hundred million dollars in order to ‘save the pension’?

      Where’d that money go? Care to take a wild guess?

  11. Everyone in RI and every other state for that matter should take the time to read, “Looting the Pension Funds” by Matt Taibbi Rolling Stone Sept. 26, 2013. Maybe that would give you a clearer look at whats been going on with our lovely politicians and other’s with power. Might make you sick, so watch out.

    • Right, Taibbi along with Ted Siedle of Forbes.

      The treasurer callously dismissed Mr. Siedle as ‘just some blogger’ when confronted with questions, but Mr. Siedle’s reputation speaks for itself. His resume is posted to the right of his articles on Forbes.

      Just hit www dot forbes dot com and enter ‘siedle’ into the search window.

      You’ll find that other states as well have been getting exposed for this ploy.

      • Your right Paul, that is another article that everyone should take the time to read, and maybe they would stop fighting between themselves in the comment sections and get educated as to what is really going on and who to blame. I didn’t see any comments under the article of “RI legislatures get raise”. I guess no one cares about that, they get more under the table benefits than we’ll ever know about.

  12. Today’s announcement will be Gina’s Valentine’s Day surprise…(or massacre)…
    whatever you agreed upon and signed for when you retired has been slashed away by a swipe of Gina’s broom.
    And why is this woman smiling??

    • she is smiling b/c if she get in as governor in January, she will stick again to the retiree’s. So if you all are foolish enough to vote her in you deserve what you get. Her and Chaffee are helping one another right to cover up what they want to change. Mr Fox is getting foxier and foxier, hell keep his speakership, under wraps and he will help gina like he did on this settlement. I am a retired state worker, since 1995.

  13. Would anyone vote for something that would freeze their income for the next twenty years or longer? A fifty thousand dollar pension today will be worth twenty five thousands in 20 years. In ten years you will be below the poverty level!!! This freeze has a very negative impact on the R.I. economy. With almost 5 billion dollars less spent on goods and services in the next ten years the economy will take a 10 billion hit.(Every dollar spent generates 2 for the economy). Money pumped in the economy generates jobs that we badly need.How can anyone back this insanity is beyond my comprehension.(especially businesses and charities).
    It was bad enough when GINA got her way.If we accept this settlement she will have us giving her the blessing and then cutting our own throats!!!
    Most of us rely on our pension , I want something better to look forward to
    instead of poverty..If the courts will not back us we will have to elect the people that will.We have at least 260 thousand votes. Another slap in the face of education and a spit in the face of the thousands of dedicated ….

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