By Katherine Gregg
More than four dozen retired state workers and public school teachers filed a new "breach of contract’’ lawsuit on Thursday, in which they vehemently object to being lumped into a "class-action’’ settlement of the state’s pension fight with its public employees unions.
Thursday is the deadline for the return of ballots in the first-round of voting on the proposed settlement of the lawsuit that the unions and other retirees group filed. Any one of the 24,000-plus ballot that is not returned will be counted as a yes.
The new lawsuit, filed by attorney Sean T.O’Leary, in Superior Court, begins where the original lawsuits did, by arguing that retirement benefits – and annual "cost of living" increases known as COLAs specifically – were contractual promises that state cannot arbitrarily break.
The lawsuit alleges breach of contract, promissory estoppel and violations of the due process and contract clauses within the state Constitution.
Bottom line: "The Plaintiffs have a contractual right to receive the vested Benefits in existence at the time of their respective retirements."
"The Plaintiffs’ contractual and/or constitutional right(s) to receive the vested Benefits in existence at the time of their respective retirements cannot be retroactively decreased or altered by the State…No legitimate public purpose exists for the State to impair the Plaintiffs’ contractually-promised Benefits, including, without limitation, the COLA."
"A class comprised of all retirees, regardless of the respective retirees’ date of retirement, cannot fairly and adequately protect the interests of the Plaintiffs, all of whom retired prior to the enactment’’ of the 2011 pension law at issue.
More specifically, the retirees argue:
"The state was required to and did promise all of the Plaintiffs, upon retirement, a three-percent compounded cost-of-living retirement adjustment …for the duration of the Plaintiffs’ respective lives.
"The [COLA] was a direct result of the Plaintiffs’ agreement to forego other benefits and/or substantial compensation…[that] comprised a substantial portion of the respective Plaintiffs’ employment agreements with the State.’’
The fight centers on proposed cutbacks in benefits in the pension overhaul approved by the lawmakers in 2011, and specifically the suspension of these annual COLAs until the retirement system is 80 percent funded, with opportunities for intermittent increases every 5 years.
The proposed settlement would provide more frequent increases for retirees, but it would not restore the arrangement in place before lawmakers –seeking to curb the exploding taxpayer cost of public employee pensions – sought to rein in the size of the "cost of living increases".
Many, if not most, of these retirees left work when the state retirement system was still providing retirees with guaranteed 3 percent compounded COLAs every year.
The lawsuit states, "Unless and until the [Employee Retirement System of Rhode Island] reaches eighty-percent funding, the Plaintiffs shall receive a COLA only once every five years…[and then] the non-compounded COLAs provided to the Plaintiffs shall range between zero and four percent….[so] irrespective of the ERSRI’s reaching eighty-percent funding, the non-compounded COLAs provided to the Plaintiffs…, will not, in any event, reach three percent…[and] will apply only to the first $25,000 of the Plaintiffs’ respective allowances."
The retirees seek a declaratory judgment that they are not – and do not have to be – a part of the "class action" settlement that prevents them from pursuing their own legal claims.
They seek a jury trial.
Spokeswomen for Chafee and Raimondo issued this response Thursday:
"Upon initial review there appears to be no new information in this complaint compared to the previous lawsuits. We won’t be commenting on this pending litigation, and will continue to work toward completion of the process laid out in the settlement agreement which is in the interest of all parties."
Raymond Sullivan, spokesman for the plaintiffs in the earlier lawsuits that led to the proposed settlement, issued this statement:
"The lawsuit filed today appears to include many of the same arguments pertaining to changes made to the state-administered pension system that were asserted by the original plaintiff group of unions and retiree coalitions.
"The terms in the settlement agreement are not perfect, but they are tangible, predictable and immediate. While we continue to believe in the fundamental strength of our legal argument, a successful outcome cannot be guaranteed.
"If this settlement agreement is not approved, the litigation will continue. If the litigation is unsuccessful, any member benefit changes or improvements achieved through the mediation process would, in all likelihood, be negated - and that's a reality no member or retiree should be forced to live with.
"The plaintiff organizations have a responsibility to act in the best interests of their members and assert that this settlement agreement gives impacted families and individuals an opportunity to plan for the future."
Source Providencejournal.com
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