PROVIDENCE, R.I. (AP) — A lawyer representing city retirees in Providence is expected to tell a judge they have approved a deal freezing automatic pension hikes and restructuring health benefits — a victory for Mayor Angel Taveras that is expected to keep the state capital out of municipal bankruptcy.
Attorney Joseph Penza, who represents about 1,300 municipal retirees, said he plans to present the results of the retirees' vote to Superior Court Judge Sarah Taft-Carter on Tuesday.
About 80 percent of the retirees voted in favor of the tentative agreement with Taveras, announced last month, Penza said. That agreement eliminates pension cost-of-living increases for 10 years, caps pension benefits and shifts retirees age 65 and older to Medicare.
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The pension overhaul is expected to save an estimated $18.5 million and the health benefit changes about $4.2 million in the coming fiscal year, according to the city.
Taveras has called the ratification "an important milestone" in his efforts to avoid bankruptcy.
Active police and firefighters are expected to vote on the agreement in the next few weeks.
Penza said Monday retirees could have rejected the negotiated agreement, pushed forward with their legal challenge to the Medicare shift and filed a new lawsuit over the pensionchanges. But he warned them that they might lose even more if the city eventually filed for bankruptcy and their pensions and benefits were cut as part of those court proceedings.
"If we won both cases, I felt in my heart that the city would have gone into bankruptcy," Penza told The Associated Press. "If you win, you lose. The unknown was the thing that prompted, I think, the 80 percent approval of the settlement."
In Central Falls, where a state receiver filed for bankruptcy in August 2011, pensions were reduced by as much as 55 percent.
The retirees' informal vote to approve the negotiated deal is the first step in a process that will stretch out over several months. They — and the judge — must approve a formal settlement agreement.
Individuals have the right to opt out of a settlement and pursue litigation on their own.
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