Court approves Cranston pension reforms

The state Superior Court has approved the pension reform Cranston Mayor Allan Fung negotiated with retirees of the police and fire department. He said it saves millions of dollars.

Nearly 500 former public safety workers in Cranston were in one of the worst funded pension plans in the state.

The plan would have drained money from the city year after year, more money than city leaders believe it could have afforded.

Taxpayers paid $26.5 million last year, and they were set to pay $28 million this year. But with the settlement, they will have to contribute $22 million.

"It shaves $6 million off our annually required contribution and gets us where we need to be so we wouldn't have to put it all on the backs of the taxpayers of the city of Cranston," said Fung, a Republican who is running for governor.

Originally, the City Council passed an ordinance freezing all future cost of living advances, or COLAs.

The retirees sued, and then negotiations led to a deal that for the first 10 years would freeze the COLAs every other year; in years 11 and 12, grant a 1.5 percent increase; and then going forward put a 3 percent cap on cost of living adjustments.

Cranston has more than one pension plan. The one reformed applies only to police and fire personnel retired before 1995.

"The rest of the employees -- police, fire, all the teachers, all the city employees -- are part of the state pension system," Fung said.

But these are problems that won't come up in the future because in the past few years, the city has made the change that many have suggested for public employees.

"New City Hall employees that are part of the Teamsters and Laborers' unions are no longer in that costly state pension system. They're in a straight 401(k)-type plan like the private sector," Fung said.

The mayor said 76 of the retirees refused to join in the new agreement, and they will be receiving no pension increases while their court fight continues.

The negotiated deal still needs the approval of the City Council.