PROVIDENCE (AP) — A bond rating agency has issued a warning over the collapse of the proposed settlement of the court challenges to Rhode Island’s pension overhaul.
Moody’s Investors Service calls the failed settlement a “credit negative” for the state and municipalities. The agency says it “prolongs uncertainty over the timing and cost of resolution of this bellwether pension reform” and risks about $400 million in savings annually.
The settlement announced in February was an attempt to resolve the challenges filed by public-sector unions and retirees. But one of the six groups that had to ratify it, police union members, rejected it in mail balloting.
The litigation is now continuing. A trial has been scheduled for September.
Moody’s had earlier praised the settlement deal as a “credit positive.”