PROVIDENCE, R.I. - A handful of state union representatives and Rhode Island State Treasurer Nancy Mayer are preparing for a federal court battle.
The issue: whether the representatives stay in or get kicked out of the state's retirement system.
The union officials argue a retroactive repeal of a law that allowed them to buy into the state's pension system was unconstitutional. The treasurer argues these people never should have been allowed into the system.
"These are people who never contributed like the rank and file of state employees contributed," Ms. Mayer said in an interview.
At issue is an 11-month window granted by the General Assembly, starting in mid-1987, during which officials of public employee unions could buy into the retirement system. The General Assembly repealed the law in 1988, but a 1989 Rhode Island Superior Court decision allowed those who applied when the law was in effect to buy into the retirement system.
In one of her first moves as state treasurer, Ms. Mayer successfully pushed for legislation that evicted the union employees from the plan.
Soon after, representatives from the state's National Education Association and the Rhode Island Federation of Teachers filed suit in U.S. District Court for the District of Rhode Island, Providence, alleging their eviction notice was unconstitutional.
In particular, the union representatives alleged the state broke its contract when it reneged on its promise to pay pension benefits. The union alleged the breach was unfair, and that members were removed from the system without any compensation.
It's estimated the union employees will cost the system $11 million, Ms. Mayer said.
One participant in the case - Ronald DiOrio, former president of the National Education Association - was indicted on charges he falsified employment records in order to get a state pension, the Providence Journal reported.
Ms. Mayer wanted the federal case dismissed, but a recent court decision denied the request. Now, both sides are waiting to bring the case to trial.
In his memorandum on the case, District Court Chief Judge Ronald R. Lagueux said a contract was made between the state and the union officials, and that the eviction act broke the contract and took away union members' promised benefits without any just compensation.
Ms. Mayer said the state may be violating the retirement system's exclusive benefit rule. By allowing union members into the plan, it benefits more than just state retirees, she said.
Currently, pension benefits for union members involved in the case have been put on hold, pending the final court decision. A trial date has not been set.