PROVIDENCE — Faced with stern warnings that the state may not have enough money within eight years to keep all the pension promises it has made, a House study commission last night endorsed the building blocks for a new — and significantly less expensive — retirement package for state employees and teachers which, for starters, would establish age 65 as the minimum age for retirement.

For new employees, the proposal endorsed by the panel was even more radical.

It would put anyone hired after July 1 in a hybrid plan that includes a much-reduced version of the defined-benefit plan that currently pays state retirees up to 80 percent of their earnings at retirement, and a 401(k)-style plan in which contributions are fixed but the size of the benefit hinges — as it does for most workers in the private sector — on how much those contributions gain or lose, over time, in the investment market.

While the panel appointed by House Speaker William J. Murphy rebuffed a bid to limit the benefit cutbacks to employees not yet vested in the system, it did exempt those already eligible to retire — but still working as of July 1 — from the proposed cutbacks: an estimated 1,628 state employees and 1,433 teachers.

With three more meetings scheduled next week, last night’s votes were an unexpected development for the stop-and-go, year-long commission made up of legislators, union leaders, private-sector lawyers and accountants and representatives of the state police, the judiciary and municipal government.

The union leaders, predictably, were in the minority on each vote taken last night, arguing throughout that no one who has put in the minimum 10 years of service that entitles them to a pension — also known as vesting — should be touched by any mid-career changes in the retirement package they have for years been led to expect. On many of the votes, they were joined by Rep. John Loughlin, a Tiverton Republican who has signaled some interest in running for Rhode Island Democrat Patrick Kennedy’s 1st District Congressional seat.

After a series of votes spanning close to two hours, the chairman — state Rep. Timothy Williamson, D-West Warwick — announced the cancellation of next week’s meetings, and told his colleagues they had completed their mission but were essentially on-call until after the state’s actuarial consultants tally up all of the potential savings from the pension cost-saving plan they endorsed last night, and the proposal is translated into legislation and given to the House Finance Committee for hearings and debate.

The proposal goes several steps further, in several respects, than the cost-saving plan that Republican Governor Carcieri proposed earlier this week.

Carcieri sought to institute age 59 as the minimum retirement age to start drawing a state pension and to eliminate the promise of 3 percent compounded annual COLAs for all new retirees, except those already eligible to retire. All but the newest state workers and teachers can retire today at any age after 28 years; newer workers must work 29 years and be at least 59 to draw a pension.

His aim: to save $47.4 million in the next year alone.

In addition to embracing age 65 as the new must for a state pension, the panel also voted to continue paying an annual cost-of-living increase, but tie it to the yearly cost-of-living index, pay it as a straight percent of the retiree’s original pension, and begin paying it on the first anniversary of a retiree’s departure though no one would receive this annual bump before reaching age 66. In the future, a pension would also be paid on an employee’s five-year salary average, instead of the three-year average currently used.

One of the first votes of the night was described by one member of the panel after another as the hardest, because it entailed a decision on whether or not to apply the pension changes to current workers, many of whom have worked for the state for a decade or more but are not yet eligible to retire. Several, including Loughlin, talked about “fundamental fairness.”

But Williamson said the state pension system is in “pension crisis mode” after decades of under-funding the growing promises the state made to its government employees.

He reminded his colleagues of the stark warning that Mark Dingley, a top aide to state General Treasurer Frank Caprio, delivered last week: even if the stock market rebounds next year, the cost to Rhode Island taxpayers of providing some of the most generous public employee pensions in the region will shoot from $370.9 million this year to a projected $836.3 million by the year 2017.

With the state struggling to pay its required contribution this year, Williamson told colleagues that sometimes leaders have to make decisions “for the whole.”

Echoing the sentiment, Rep. Elaine Coderre, D-Pawtucket, said it might not sound fair to scale back someone’s expected pension benefits, but it would be less fair for someone who worked their adult life in government to end up with no pension, and no money to feed their families in retirement.

Coderre said what she too took from Dingley’s briefing last week was this: “We have a real, real crisis here,” and “I am afraid if we don’t make some of these cuts, there will be no money … no pension benefits.”

Putting the decisions in an even larger context, accountant Grafton “Cap” H. Willey said the private-sector employers with whom he meets regularly tell him they have lost an average of 40 percent of the value of their pension funds, and it would be unrealistic to try to keep “the public sector immune” by asking private-sector taxpayers to make up the shortfall in their pension accounts, along with their own.

The vote on this critical decision was 12-to-4, with state AFL-CIO secretary treasurer George Nee; J. Michael Downey, president of the largest state employees union; Loughlin and the absent Robert Walsh, executive director of the National Education Association of Rhode Island, in the minority. Walsh was allowed to vote by proxy.

kgregg@projo.com