Small State Gets Big Pension Push
Rhode Island's rollback of public-employee retirement benefits has turned the small state into a national battleground over pensions.
A Rhode Island court heard arguments Friday in a closely watched lawsuit over the pension changes, which took full effect earlier this year.
Nearly every state in the U.S. has enacted some form of pension changes in the past four years, ranging from increasing contributions from workers to more-severe moves, such as Rhode Island's decisions to suspend cost of living raises until the pension plan is financially healthy and shifting workers into a system that combines a traditional pension with a 401(k)-style account.
Officials seeking to overhaul pension systems across the country are tangling with a powerful, well-heeled opponent: public-sector unions. In Wisconsin, officials who sought to curb the unions' collective bargaining abilities drew support from backers aligned with Republicans.
The Rhode Island affiliate of the American Federation of State, County and Municipal Employees has sued the state in Rhode Island Superior Court, saying the pension changes violated public workers' contract rights. The national arm of the large public employees union has assured the local affiliate that it will have adequate resources to pursue its lawsuit, a union official said.
Rhode Island officials hired well-known attorney David Boies to defend against the unions' legal challenges to the cuts. Mr. Boies, who is charging Rhode Island a cut-rate $50 an hour for his legal services, said he agreed to take the case because he believes that pension changes are needed across the U.S.