Prov. retirees file 'friendly lawsuit'

PROVIDENCE, R.I. (WPRI) - Providence's retired police officers and firefighters filed suit against the city Thursday over their pensions - and Mayor Angel Taveras is elated.

The class action suit filed by the Providence Retired Police and Firefighter Association asks Superior Court Judge Sarah Taft-Carter to throw out pension reductions approved in April by the City Council because they violate federal and state law.

At first glance, it sounds a lot like the lawsuit filed last month by state retirees against similar changes made by the General Assembly in November. But unlike state officials, Providence's leaders are welcoming their suit.

"The difference is, this is a friendly lawsuit," Taveras spokesman David Ortiz told WPRI.com. "These are the legal procedural steps that are needed to finalize the tentative settlement."

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Taveras and the retirees reached a landmark deal on May 30 that will scale back pensions in the future, freeze cost-of-living adjustments now and restructure health benefits to stabilize Providence's finances and improve the health of the city pension fund.

The tentative agreement would allow the city to cap all pensions, suspend cost-of-living adjustments (COLAs) for 11 years and eliminate 5% and 6% compounded COLAs for good while also moving retirees to Medicare, saving an estimated $18.5 million in 2012-13 alone.

Last month, the retirees voted overwhelmingly to approve the deal. The lawsuit filed Thursday and confirmed by a court spokesman asks Taft-Carter to certify the retirees as a class, allowing them file a class-action suit.

By certifying the retirees as a class, Taft-Carter can consolidate the pension suit with another suit challenging Medicare changes and thus move toward formal approval of the settlement. Retirees will be notified of their inclusion in the class and be given the option of opting out.

According to Ortiz, the next step is for the city's police and fire unions to vote on the tentative settlement; if the active workers approve it, they too will file friendly lawsuits. Taft-Carter could finalize the settlement by the fall.

While the retirees' lawyer, Joseph Penza, filed the new lawsuit to move the settlement process forward, he still included a full legal argument challenging the original unilateral pension changes approved in April by the City Council, prior to the deal.

"The city had other less drastic measures available to it to achieve a balanced budget and increase pension funding ... such as seeking restoration of state aid and reduction of mandated spending in addition to a number of other proposals from the General Assembly," Penza wrote in the legal complaint.

Penza was not available for comment on Monday.

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi's Notes blog. Follow him on Twitter: @tednesi