Moody's Says Local Pension Settlement is "Credit Positive"

A Moody's investor note last week praised the city's landmark local pension deal with police and fire retirees, calling the deal a "credit positive" for the city.

Ted Nesi at WPRI reported that Moody's Analyst Vito Galluccio wrote the pension deal "will help sustain Cranston’s finances, which has been challenged by growing pension costs and deficits in its school fund."

Superior Court Judge Sarah Taft-Carter approved the pension deal last month.

The agreement will suspend cost of living adjustments (COLAs) every other year and caps them at 3 percent. It also shaves $6 million from the city's required contribution to the plan in the current fiscal year and is expected to save tens of millions over the next few decades. 

The deal also is projected to get the plan to fully funded status by about 2040.

The plan covers more than 450 retirees and has been closed to new members since 1995. 

The City Council is expected to vote to accept the settlement at its meeting later this month. The Finance Committee did review the matter last week and we'll post a story with more details about that vote, including more information about the more than 70 members of the plan who opted out of the settlement and could be suing the city, soon.


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