Rhode Island Pension Reform Bill Heads To Legislative Vote Next Week

11/11/2011 02:52 pm ET | Updated Jan 11, 2012

The bill to reform Rhode Island's public employee pension system passed two legislative committees Thursday night, setting the scene for the full legislature to vote on the measure next week.

The bill passed with largely bipartisan support, with some Democrats dissenting, WPRI reported. The bill was revised prior to the committee vote, addressing concerns raised about cost of living adjustments in pensions and the retirement age.

"We'll do better on the floor," Carnevale told union lobbyists as he shook their hands following the committee's approval of the measure, which was bitterly opposed by labor leaders. Thousands of workers and retirees protested it in a rally on Tuesday.

The amended bill unveiled Wednesday evening suspends cost-of-living adjustments (COLAs) for all workers, though an interim COLA may be awarded every fifth year if the pension fund's investments preform well. It also raises the official retirement age to 67 with some exceptions and puts most workers into a hybrid plan.

The original bill was proposed by Gov. Lincoln Chaffee (I) and Treasurer Gina Raimondo (D) to address mounting pension liabilities that have threatened the state fiscally. Among the provisions revised in the amendment process is allocation for the cost of living adjustments to be given to retirees every five years. Under the revised bill, the COLAs would be limited to four percent and would only cover the first $25,000 of a pension. The original legislation had required retirees to wait until the pension system was 80 percent funded before receiving a COLA increase.

The revised bill also produces a new plan to allow for retirees to ease into pension benefits starting at age 59. The original Chaffee-Raimondo plan had retirees starting to receive pension benefits only at the minimum age to collect Social Security.

The pension reform legislation has been met with controversy, and in October public workers staged protests at the state capitol in Providence. The head of the state's firefighters' union accused Raimondo of "cooking the books" on the pension system's numbers in order to pass the legislation. Raimondo, in her first year as state treasurer, defended the plan saying it would avoid exposing the state to additional pension costs, ward off the potential bankruptcy of the pension system and prevent potential tax hikes and service cuts to local governments.

The Rhode Island pension bill moves forward days after Ohio voters rejected their own set of public employee reforms, including revisions to pension policy. Ohio voters rejected Issue 2, which would have upheld a law passed earlier this year by Gov. John Kasich (R) and the Republican-controlled legislature, to eliminate collective bargaining for public workers, along with requiring public employees to pay into pension and health care benefits.