Public-sector unions in Rhode Island filed lawsuits Friday challenging recent changes to the state’s pension system, opening a new chapter in the state’s contentious debate over public pension benefits.
The four lawsuits filed in Superior Court seek to block last fall’s landmark pension law, which lawmakers passed over the objections of many state workers and retirees.
The new law is intended to save billions of dollars in future years by suspending retiree pension increases, raising retirement ages and creating a new benefit plan combining traditional pensions with 401(k)-style accounts. The changes will impact 66,000 active and retired state workers, teachers and municipal employees.
State Treasurer Gina Raimondo and Gov. Lincoln Chafee said the state was prepared to defend the overhaul which they crafted and helped push through the General Assembly.
Unions had promised to challenge the modifications in court even before lawmakers approved them. Bob Walsh, executive director of the National Education Association Rhode Island, said the changes violate contractual obligations to public workers and that lawmakers should have negotiated pension concessions before voting to reduce benefits.
“Time will tell who is right and who is wrong,” Walsh said. “We know there were more reasonable alternatives to what they did.”
Following a meeting Friday with attorneys from both sides, Superior Court Associate Justice Sarah Taft-Carter denied a request by the unions to block the changes from going into effect on July 1.
Chafee and Raimondo argued last fall that escalating pension costs would ultimately swamp state finances if not reined in. Raimondo said her office will now work to help defend the law, which she said was the culmination of 11 months of “thoughtful, fact-based analysis and input from retirees, employees and taxpayers.”
“It was carefully designed by the General Assembly in an effort to save our state-administered retirement system,” the Democrat said in a statement. “Treasury will work diligently to defend the important work done by the General Assembly.”
Raimondo and Chafee crafted the proposal with the expectation that it would be challenged in the courts. On Friday, Chafee, an independent, said he’s “confident the state’s legal counsel is prepared to represent the taxpayers.”
The next hearing in the case has been scheduled for July 16.