Rhode Island lawmakers are scheduled to vote today on a proposed overhaul of the state’s pension system, but public employees promise a court battle if the reform passes.
The bill would suspend automatic annual cost-of-living increases for public retirees, adjust retirement ages and give most current employees a new hybrid pension/401(k)-like retirement account.
Proponents say the bill would save taxpayers billions of dollars over the coming years and make the government’s retirement costs more manageable, given the state’s shrinking economy. Public employee unions, though, argue that the changes are too dramatic and have promised to sue the state if the bill is adopted.
Whatever happens in Rhode Island could foreshadow similar battles throughout the country. Nearly every state is facing its own pension crisis, thanks to rising pension costs, large investment losses and post-recession budget deficits.