Parties in Rhode Island pension lawsuit return to court with settlement in the works



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PROVIDENCE, Rhode Island — The legal battle over the state's 2011 public pension system overhaul moved forward in court Thursday, even as some of the plaintiffs are agreeing to settle.

Lawyers for the public employees and retirees who are suing and the state's attorneys returned to court in Providence for pretrial motions.

Both the retirees and the state requested a summary judgment, with the retirees stating they have contractual rights to cost-of-living increases and the state arguing that they don't.

The judge didn't immediately rule. If either motion is granted in full, the judge will rule for one side and there will be no trial.

The coalition representing several groups of retirees overwhelmingly accepted a proposed settlement Monday.

Lawyers for both sides said they're continuing to prepare for the April 20 trial and couldn't discuss the settlement because of a court confidentiality order.

Attorney John Tarantino, who represents the state, argued that it can't be held to a contract unless it's "unmistakably clear" it intended to be bound. He noted that the legislature removed the statutory language stating that cost-of-living increases were a "lifetime" benefit more than 30 years ago.

Carly Beauvais Iafrate, an attorney for the retirees, said implied contracts are equally enforceable and the retirees earned the compensation. She said the state has spent the past 30 years planning to pay the increases for life and telling people they would be paid.

The retirees also contend that the state reducing the increases amounted to conversion, or civil stealing. The state said the benefits are not specifically identifiable property, capable of being converted.

In a written decision Thursday on that claim, Judge Sarah Taft-Carter agreed with the state that the benefits are part of the state's general pension funds and therefore do not meet the requirement that converted property be specifically identifiable.

The retirees' coalition represents about 7,500 people.

The proposed settlement approved by the retirees includes a cost-of-living increase in 2017, a year earlier than planned, and increases once every four years instead of every five for retirees covered by funds that are not 80 percent funded. The cap for calculating the benefits would increase for some retirees, and the calculation would be based on a new formula using both the performance of investments and the Consumer Price Index.

All retirees would receive two additional one-time $500 stipends, payable over the next two years. Those who retired by June 30, 2012, could receive up to an additional $2,000 before the increase in 2017.

Frank Williams, a retired Rhode Island Supreme Court chief justice who is working to broker a settlement, is meeting with the other unions.

The parties are due back in court next week.

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