BOSTON (Reuters) - A press conference at which Rhode Island state and public employee union officials were expected to announce a long-awaited pension reform deal has been postponed indefinitely, a federal mediation agency said on Wednesday.
State and union officials had been holding mediated closed-door talks since 2012 over Rhode Island’s landmark public pension reform law, which cut benefits to narrow a multi-billion dollar funding gap, and were scheduled to disclose a possible settlement on Wednesday afternoon.
The U.S. Federal Mediation and Conciliation Service said early Wednesday that attorneys for both sides requested the press conference be postponed “as the parties continue to talk and work with federal mediators”.
“The parties remain under the court-mandated confidentiality order. Further updates as to scheduling will be available through FMCS, when appropriate,” it said.
Rhode Island’s 2011 pension reform law was intended to narrow one of the nation’s worst public sector pension funding gaps by increasing retirement age, delaying cost-of-living adjustments, and shifting employees to hybrid plans.
The law sought to reduce the state’s roughly $7 billion unfunded liability by more than $3 billion while targeting an 80 percent funding level for all pension systems.
It became a model for other cash-strapped states seeking to rein in costly pension plans, but has also been widely criticized by public-sector unions and retirees who say the changes are unfair.
Rhode Island’s public workers unions sued to block the law, triggering the federally mediated talks.
Rhode Island is among the five U.S. municipal bond issuers with the widest spreads for 10-year bonds over Municipal Market Data’s benchmark triple-A scale, a measure of risk. It ranks behind Puerto Rico, Illinois, New York City and California.
The state and its towns have been facing fiscal turmoil for years as high unemployment and slow growth saps state revenues.
Reporting by Richard Valdmanis; Editing by Sophie Hares