According to a joint statement by union leaders and Rhode Island officials under Governor Lincoln Chafee, an accord has been reached to settle the challenges lodged against the public pension law reforms. Bloomberg said the reforms were aimed at giving strength to one of the most underfunded retirement programs in the US.
An emailed statement by Chafee read that under the accord of the lawsuits that were filed by public-employee unions, the state of Rhode Island had agreed to restore increases in pensions at an accelerated pace as compared to the provision said in the revised public pension law. The accord will allow state officials to maintain the pension system changes, of which will offer the state around $4 billion in potential savings.
The joint statement of Chafee, Rhode Island Treasurer Gina Raimondo and union leaders today read, "We believe this proposal is fair for our public employees, retirees, taxpayers and cities and towns."
Bloomberg said the accord would help Rhode Island's preservation of effort to lead the state and local governments' goals to control the costs retiree costs as losses from pension plans had drained public assets. According to estimates of the collective unfunded pension liability across the US, the losses run as high as as $4.6 trillion.
The Wall Street Journal said the accord between the state and the union leaders would need approval from rank-and-file members, ordered a judge and the Rhode Island legislature, where its leaders had expressed worriers about reopening a debate over the changes that had brought a financial stability measure to Rhode Island. Rhode Island currently has the highest unemployment rate in the country at 9.1%. as as of December last year.
The advocates of the pension plan reform were obviously disappointed with the accord. Former director Gary Sasse of Department of Administration under Republican Gov. Donald Carcieri said, "We were told that unless that unless the [2011] bill they proposed was enacted that there would be dire consequences, and all of the sudden there are not dire consequences? Clearly there is going to be additional costs to taxpayers,"
