Providence Mayor Angel Taveras has negotiated a deal with city workers and retirees on pension changes, city officials said Wednesday.
The tenative deal covers police and fire unions, their retirees, and other city workers.
The mayor’s office said the agreement would keep the city out of bankruptcy by saving $18.5 million a year.
“If this deal is approved, I believe it not only saves our pension system, it saves our city. And that to me is the important thing. It’s comprehensive. It’s something that we’re looking at the long term. It’s not easy. It’s difficult, but it’s something that’s going to save our pension system and save our city,” Taveras said.
The deal calls for the suspension of cost of living adjustments for 10 years with an exemption for families of those killed in the line of duty. The 5 and 6 percent compounded COLAs would be eliminated altogether.
Pensions would be capped at what an active employee at the retiree’s rank makes or at one-and-a-half times the state median income.
Retirees over 65 would be moved to Medicare.
Unions, retirees and City Council must approve the proposed changes.
City officials had previously approved a cost-cutting pension plan that froze automatic adjustments for retired municipal workers. The measure was expected to be challenged in court.