In a settlement that still needs to be approved, Rhode Island has agreed to cut back on planned pension reforms for state workers, the Wall Street Journal reports. Favoring veteran employees, the settlement rolls back the retirement age from 67 to 65, increases the frequency of cost of living adjustments (COLAs) and restores the DB plan for workers with 20 or more years of service. The original cuts would have saved the state $4 billion over two decades.
State treasurer (and gubernatorial candidate) Gina Raimondi clams that the new deal will preserve most of the savings from the original bill, which affects 66,000 current and retired workers, but some are skeptical. Before the law was passed, 58% of teachers and 48% of all retired state workers were receiving as much or more than they earned while working, with 45% of the unfunded liability due to COLAs. The lawsuit brought by unions claimed that the law was unconstitutional — the settlement was a result of court-ordered mediation.
Meanwhile other states like Illinois are facing the same issue, with unions threatening to sue. And recently, Oklahoma advanced a bill that would put new workers into a DC plan.
