It appeared to be a "no-brainer" but some legislators on the Appropriations Cmte couldn't quite grasp the upside of the Pension Funding Agreement. Ultimately the agreement passed 30-10 on the House side and 10-2 on the Senate side.
The funding agreement simply eliminated the Governor's "Fiscal Cliff" by refinancing the pension liability and leveling out the annual costs so that the State doesn't have to pay an excessive and increasing amount every year for the next 15 years. Seems simple...re-finance the pension debt and eliminate the "balloon payments".
A public hearing was held on the agreement in the Appropriations Committee on 1/24/17. The legislators didn't raise concerns with the financial plan (in fact it was universally accepted as a wise and responsible improvement), however, there were a few legislators on the Committee who thought the agreement didn't go far enough because it didn't demand higher employee pension contributions. These legislators also vowed to look for pension changes before accepting any union contracts.
Senate Minority Leader Len Fasano (who voted in favor of the agreement) subsequently sent a letter to Governor Malloy warning of his future opposition to union contracts if there aren't pension contribution changes. Len Fasano's letter praised the recent pension reforms in Rhode Island which eliminated defined benefit plans and placed employees into 401(k) style pensions. SEBAC has opened discussions, but the Governor does want to meet informally with SEBAC again before his budget address in early February.
A&R will not take a concessionary stance. We will oppose reductions in member benefits. We will oppose increases to the retirement age. We will oppose converting our defined-benefit retirement plan into a worth-less 401(k). That is not to say that we will oppose any and all changes. We are willing to listen. However, cooperation will not be forthcoming if the Governor’s Office echoes the hard-line, over-reaching positions of Senate Republican President Len Fasano. We may be willing to cooperate, but we will not be cooperative unless and until the Governor and the Legislature take the approach that this needs to be a collaborative effort. If they have certain objectives that must be met to maintain the viability of our pension/healthcare plan, then the words “cooperation” and “collaboration” need to make their way into the conversation. Unless we see a true partnership evolve, we will continue to oppose any and all changes. We will not accept another 23-page concession package which delays and diminishes our future.