Ruggerio bill prohibits using pension funds for legal fees

Ruggerio bill prohibits using pension funds for legal fees

PROVIDENCE - Senate Majority Leader Dominick Ruggerio announced last week that he will introduce legislation to prohibit the use of retirement system funds to pay the state's legal costs in its defense of unions' court challenge of pension reforms enacted into law in 2011, or similar cases that may arise.

"It is a sad irony that, under current law, the state must use money from the pension system to defend the new law in court," said Ruggerio, a Democrat serving District 4 in Providence and North Providence. "That is essentially using future pensioners' own money to fight against a suit they brought, and that's just not right or fair. Of course the state must pay its legal bills, but it should find the money elsewhere and not take it from the pension funds."

Legislation to be introduced by Ruggerio would add new language to the existing law related to the restricted receipt account used to pay expenses of the retirement board and the cost of maintaining and administering the retirement system. The new language provides "that any litigation costs paid from the account shall be limited to defending those actions that arise as a result of decisions made by the retirement board."

The pension reforms adopted in 2011 were a result of new law passed by the General Assembly, and not as a direct result of any action by the retirement board, according to Ruggerio.

According to one recent report, the cost of defending the General Assembly's pension reforms hit nearly $500,000 by the end of 2013, said Ruggerio, the bulk of the money for a law firm hired by the state and the remainder for actuarial consultants. Two lawsuits challenging the new law have been merged into one in Rhode Island Superior Court, where Judge Sarah Taft-Carter has ordered closed-door negotiations in an attempt to reach a settlement.