Pension deal in jeopardy as police block votes ‘no’
A proposed settlement to six lawsuits challenging state pension reform appears in jeopardy after a voting block of eligible police employees rejected the plan in the initial round of voting.
Ray Sullivan, a spokesman for the plaintiffs in the matter, said in a Monday statement that 61 percent of police personnel who cast ballots had voted “no” on the deal. Under the terms of the agreement, if more than 50 percent of any one of six voting blocks – which also included teachers, retirees, state workers, municipal workers and fire personnel – opposed the settlement, it would not move forward and litigation would continue.
Sullivan said the parties involved notified Judge Sarah Taft-Carter of the vote count on Monday morning, and the judge subsequently ordered a return to mediation “to explore whether a settlement can still be reached.” A follow-up appearance with the judge is planned April 14.
“Plaintiff organizations are in the process of sharing this new information with their members and will participate in mediation, which could resume as early as today,” Sullivan’s statement reads.
Gov. Lincoln Chafee and General Treasurer Gina Raimondo in a joint statement said the state would continue to participate in the mediation.
The initial round of voting included current members of collective bargaining units and retiree organizations impacted by the settlement, totaling 23,624 people. Under the procedure set up through negotiations, ballots were mailed to those eligible, and the return of the ballots was only required for those voting “no.” That aspect of the process – and reports of ballots being mailed to deceased persons or not provided to eligible voters – led to challenges and much criticism of the vote.
According to Sullivan’s statement, there were 417 eligible voters in the police block, with 254 ballots received and 61 percent rejecting the settlement.
Police were the only block to reject the deal, according to Sullivan. There were 7,742 eligible teachers, with 2,320 ballots received and 31 percent voting “no”; 6,840 eligible retirees, with 1,810 ballots received and 26 voting “no”; 5,405 eligible state workers, with 1,697 ballots received and 34 percent voting “no”; 3,261 eligible municipal workers, with 504 ballots received and 15 percent voting “no”; and 619 eligible fire personnel, with 170 ballots received and 27 percent voting “no.”
“More than 70 percent of eligible members and retirees did not reject the settlement … and only the smallest group (representing less than two percent of all eligible members) voted to reject the settlement,” Sullivan’s statement reads.
ProMail of Providence oversaw the mailing and counting of the ballots. Sullivan said the vote tabulation was reviewed, and an independent accounting firm is expecting to certify the results.
The voting was the first step in a lengthy approval process for the settlement, which was unveiled in February by Chafee, Raimondo, other state officials and attorneys representing the unions after months of closed-door talks ordered by the judge and overseen by federal mediators.
The process called for the initial voting, followed by the court’s involvement to amend the complaints in six legal challenges to 2009, 2010 and 2011 pension changes to designate the plaintiffs as a class. The blocks would then vote again within a 45-day window, with the same criteria for passage in place. If the settlement were again supported, it would go back before the court for a fairness hearing and judicial approval.
Under the agreement, the General Assembly would also need to back the settlement, without amendment, for it to take effect.
The settlement would keep in place much of what was included in the 2011 pension overhaul, which was championed by Raimondo and approved by lawmakers.
An outline provided by the parties involved in the negotiations states the settlement “retains structural elements” and “preserves 95 percent of the savings” from that law, known as the Rhode Island Retirement Security Act, or RIRSA.
The primary changes in the proposal involve cost-of-living adjustment, or COLA, and retirement age calculations. Full details regarding the settlement are available online at www.ripensioninfo.org.
State Director of Administration Richard Licht in February said the deal would leave the state’s total unfunded pension liability at approximately $5 billion, up from the roughly $4.8 billion at which it stood under the RIRSA. Before the 2011 law, he said, the unfunded liability was approximately $8.9 billion.
The settlement would result in an approximately $232 million increase in the unfunded liability, and figures provided by the parties involved indicate the state’s share would be roughly $123 million, while the share for municipalities would be approximately $109 million.
The settlement would not impact planning for the coming fiscal year, but for fiscal year 2016, which begins in July 2015, the deal would result in a combined estimated increase of $24 million in pension liability for the state and municipalities.
Cranston’s police and fire unions have opted out of the settlement.