City, public safety retirees reach deal on pension case

City, public safety retirees reach deal on pension case

PAWTUCKET – City officials and retired public safety employees announced this week a settlement in a five-year lawsuit over cuts in retiree pension payments.

Last Thursday, Aug. 15, District Court Judge John McConnell Jr., approved a class action settlement protecting “pensioners, the taxpayers of Pawtucket and the long-term stability of the plan,” according to a news release from the mayor’s office.

“I am pleased with the outcome of this case on behalf of all parties involved. These are difficult situations to deal with, on the one hand you want to protect the taxpayers and the stability of the pension plan and on the other hand, we need to be fair to the dedicated and hardworking retirees who certainly earned their benefits. I firmly believe that this agreement achieves those goals,” said Mayor Donald Grebien in a statement.

Jeremiah O’Connor, representing the Pawtucket Public Safety Retirees Association, said this settlement is like having three-quarters of a glass of water and someone keeps the rest from you.

“You’re still not made whole,” he said. “We got a portion of it back, and I would hope that the city would feel that before they go out taking things they would comply with the Constitution.”

This should all have been done at the collective bargaining table, he said.

“I guess we were the hanging fruit,” he said. “They found out the hanging fruit wasn’t fully ripe, they put their fingers in it, and squished it.”

This lawsuit cost $100,000 just to get it started, said O’Connor, but was worth it.

Retirees filed a class action lawsuit against the city in early 2015 over Grebien’s decision to cut off “cost of living” (COLA) pay increases for some members, for an estimated annual savings of $1 million.

The genesis of this case began in 2012 when the state mandated cities and towns to institute a financial improvement plan, said Grebien. He said his administration and the City Council adopted the plan in 2013 after many public hearings and outreach to those individuals in the plan. The goal was to make sure the city complied with state law but, more importantly, to ensure the protection of those in the pension system and the long-term stability of the pension plan, he said.

The settlement last week memorializes an agreement between the parties allowing for 50 percent of the lost COLA from July 1, 2013 to July 1, 2019, and restores retirees’ monthly pension to 65 percent of the lost COLA benefit from July 1 forward.

“As a steward of the city’s finances, the council and I have a responsibility to honor our financial obligations in a fiscally responsible manner and certainly an agreement of this magnitude will provide predictable stability for our residents of Pawtucket for years to come,” said Council President David Moran in a statement.

The settlement was only possible because all sides worked together for the common good and future financial security of the residents and the pension system, said officials.

O’Connor, who will not benefit personally from the settlement, as he is not among those receiving the COLA, said the impact varies depending on the compounding factor of the COLAs.

“This was all about us. Who would have thought cops and fire would come together and be one group,” he said.

Members reached into their pockets and made this work, he said.

“What we got was recognition out of this as a group,” he said.

This was never a complex matter, he said, and the numbers on the city side didn’t come close to adding up to the $20 million officials said they were short.

O’Connor said he’s hopeful this case brings more recognition for associations such as his, which does not have the same standing as unions.

O’Connor said back in 2015 that “the city violated our rights” under the Rhode Island and U.S. Constitution when officials took away the cost of living increases, otherwise known as COLAs, and “broke the contract.”

“Hopefully we get the court to do the right thing and have the city do what they should have done in the first place,” he said then.

At the heart of the lawsuit was city officials’ long history of failing to do “what they should have done” and adequately fund pensions, as O’Connor put it at the time.

Dylan Zelazo, representing Grebien’s administration at the time of the 2015 lawsuit, said the city attempted to impact retirees as little as possible with a COLA freeze of three years and no adjustment to existing benefits. Other options were much more severe.

The Breeze reported in March that huge annual payments topping $14 million just last year were putting a dent in the police and fire pension plan’s unfunded status, bringing it to 46.1 percent funded from 34 percent in 2013. The pension plan includes about 400 retirees and 300 active members.