Providence Mayor Angel Taveras reached a tentative accord with union leaders and retirees that cuts pensions for workers including police and firefighters and prevents bankruptcy for the Rhode Island capital, Bloomberg News reported today. Providence needs almost $1 billion to fulfill its contract promises after failing to make required contributions to its retirement system. The agreement was reached a month after Taveras signed an ordinance mandating similar changes, prompting threats of lawsuits from unions and retirees. Opponents said the cuts would break labor contracts. The accord needs to be formally approved by union members and retired workers as well as the City Council, the mayor said. Under the agreement, the city would suspend annual cost-of-living adjustments for current and future retirees for the next decade, Taveras said. It would also permanently end 5 percent and 6 percent annual increases given to about 600 former firefighters and police, and cap all future pensions at 1.5 times the state's median annual household income, or almost $82,400.
