SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Judges in two states allow pension benefit cuts

Friday, Jul 1, 2011

* Two state judges, one in Colorado, the other in Minnesota, have ruled that certain cuts to pension benefits are constitutional in those states. First up, Colorado

Under the legislation, employee/employer contributions were modified, new contributions for working retirees were created, the age and service requirements of certain groups of employees before they are eligible to receive retirement benefits was increased, and a cap was put on cost of living increases for retirees.

At issue in this case were Sections 19 and 20 of the bill, modifying the cost of living adjustments.

Depending on the sub class, the adjustments were modified from an annual increase of 3.25 percent or 3.5 percent to an annual increase to be calculated under a different formula and capped at 2 percent.

The plaintiffs in the case argued that the two sections of the bill were in violation of the Contract Clause of the Colorado Constitution and the Contract, Takings and Substantive Due Process Clauses of the U.S. Constitution.

“While Plaintiffs unarguably have a contractual right to their PERA pension itself, they do not have a contractual right to the specific COLA formula in place at their respective retirement, for life without change,” Denver District Court Judge Robert S. Hyatt wrote.

What that means is the judge ruled that COLAs could be cut, but not the actual pension benefits.

* Minnesota

Statutes regulating benefit formulas do not constitute contracts that require negotiating, ruled Ramsey County District Court Judge Gregg Johnson. He said the benefit adjustments amounted to a reasonable response to a fiscal threat that jeopardized the long-term interests of retirees.

At issue were cost of living adjustments that occurred automatically for retired state employees drawing pensions. The changes affect the state’s three largest retirement funds. One is for teachers, another covers state employees and the third covers local municipal workers.

The pension funds differ, but under the changes, current employees and employers will have to pay more into the fund while retirees will receive smaller annual increases in their payouts. For retired teachers, payouts will be frozen for two years, starting next year.

* COLA cuts are picking up steam elsewhere as well

Several states, including New Jersey in a move this week, have cut back on cost-of-living adjustments for retirees in an effort to shore up the finances of public-employee retirement systems. Cost-of-living adjustments are annual increases to retirement benefits that are essentially designed to keep pace with inflation.

The cases in Minnesota and Colorado have been closely watched by lawmakers across the country as they contemplate similar changes in their own states. Unlike changes to benefits for new workers, which can take decades to deliver savings to state and local governments, rolling back cost-of-living adjustments can yield immediate savings.

While each state has different legal protections for public-worker pension benefits, the rulings “will really have an impact on what other state legislatures choose to do,'’ said Amy Monahan, a professor at the University of Minnesota law school who has studied legal issues of public pensions. “Even if the rulings are not direct precedent, legislatures will now say, ‘We might as well try it.’ “

Stephen Pincus, a Pittsburgh attorney representing the retirees who filed the lawsuits, said his clients were “contemplating filing an appeal.”

* However, Minnesota doesn’t even mention pensions in its constitution. And Colorado’s constitution has nothing that even comes close to Illinois’ language

Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.

So, if you’re a state employee or a retiree here, don’t freak out yet.

- Posted by Rich Miller        


No Comments

Be the first to comment.

Sorry, comments for this post are now closed.


* Reader comments closed for the weekend
* No pension bump for Stermer, MJM still not persuaded on special session
* SUBSCRIBERS ONLY - More comptroller stuff
* 1:30 comptroller announcement expected - Stermer appointed, says he will resign January 12th
* SUBSCRIBERS ONLY - Comptroller stuff
* Golden Horseshoe Awards
* Bears open thread
* More adventures in misgovernance
* Question of the day - Golden Horseshoe Awards
* Petulance all around
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............


Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

          
        * “Ok Google” on Chromebooks now an experimental feature
        * #MakeItHappen moment: The speech of a lifetime
        * Pics and Video: How Android 5.0.1 translates to Sense 6
        * How to avoid taking lousy iPhone holiday photos
        * VIDEO: Android 5.0.1 on Samsung Galaxy Note 4, Note Edge, Galaxy S5
        * Walt Disney World to Begin Accepting Apple Pay Starting December 24
        * How to use benchmarks to cut through marketing hype

        * Meet the Man Who Decides How Facebook Rules the Web, Live at Code/Media
        * Structure Data: From BuzzFeed to brain science
        * Minimize Religious References in Your Resume to Increase Responses
        * Create a "Fake" Automatic Paycheck When Your Income is Irregular
        * 2016 Cadillac CTS-V will go 200mph thanks to Supercharged V8
        * F1 Racers Helped Design This Bike’s Flawlessly Smooth Ride
        * Need to wrangle SQL, NoSQL data? Espresso Logic says it can help

        * Digging into David Robertson's reverse splits
        * The year in injuries: White Sox have been better, could've been worse
        * Williams: Make protesting voices heard through vote
        * Williams: Make protesting voices heard through vote
        * White Sox also had a December to remember 100 years ago
        * Terrerobytes: Future of Cuban baseball complicated on both sides
        * White Sox sign George Kottaras to a minor league deal

        ...............


        Main Menu
        Home
        Illinois
        YouTube
        Pundit rankings
        Obama
        Subscriber Content
        Durbin
        Burris
        Blagojevich Trial
        Advertising
        Updated Posts
        Polls

        Archives
        December 2014
        November 2014
        October 2014
        September 2014
        August 2014
        July 2014
        June 2014
        May 2014
        April 2014
        March 2014
        February 2014
        January 2014
        December 2013
        November 2013
        October 2013
        September 2013
        August 2013
        July 2013
        June 2013
        May 2013
        April 2013
        March 2013
        February 2013
        January 2013
        December 2012
        November 2012
        October 2012
        September 2012
        August 2012
        July 2012
        June 2012
        May 2012
        April 2012
        March 2012
        February 2012
        January 2012
        December 2011
        November 2011
        October 2011
        September 2011
        August 2011
        July 2011
        June 2011
        May 2011
        April 2011
        March 2011
        February 2011
        January 2011
        December 2010
        November 2010
        October 2010
        September 2010
        August 2010
        July 2010
        June 2010
        May 2010
        April 2010
        March 2010
        February 2010
        January 2010
        December 2009
        November 2009
        October 2009
        September 2009
        August 2009
        July 2009
        June 2009
        May 2009
        April 2009
        March 2009
        February 2009
        January 2009
        December 2008
        November 2008
        October 2008
        September 2008
        August 2008
        July 2008
        June 2008
        May 2008
        April 2008
        March 2008
        February 2008
        January 2008
        December 2007
        November 2007
        October 2007
        September 2007
        August 2007
        July 2007
        June 2007
        May 2007
        April 2007
        March 2007
        February 2007
        January 2007
        December 2006
        November 2006
        October 2006
        September 2006
        August 2006
        July 2006
        June 2006
        May 2006
        April 2006
        March 2006
        February 2006
        January 2006
        December 2005
        April 2005
        March 2005
        February 2005
        January 2005
        December 2004
        November 2004
        October 2004

        Blog*Spot Archives
        November 2005
        October 2005
        September 2005
        August 2005
        July 2005
        June 2005
        May 2005

        Syndication

        RSS Feed 2.0
        Comments RSS 2.0
        WordPress

        Loading


        * Quinn set to go to Maryland to visit soldiers..
        * Quinn departs for Maryland to visit soldiers..
        * Quinn Names Stermer As Comptroller..


        * Autopsies set for 4 people shot dead in Illinois
        * Cook County judge to address cameras in courtroom
        * Lake Shore Drive section closed after accident
        * Quinn departs for Maryland to visit soldiers
        * 4 found dead, including 2 children, in Rockford
        * Quinn set to go to Maryland to visit soldiers
        * Illinois to get $1.6M for Heart of Dallas Bowl
        * Report: Illinois treasurer OK'd raises for dozens
        * 1 dead, many injured in shooting at suburban party
        * Milestone in osprey program as birds migrate

        * Raising juror pay gets mixed reviews
        * Gov. Quinn set to go to Maryland to visit soldiers
        * State treasurer employees get raises, stipends as Rutherford’s term comes to end
        * Springfield-based U.S. attorney’s investigations nab 13; race questions raised
        * 2nd Illinois prison with possible chickenpox
        * Quinn signs bill increasing juror pay
        * Quinn names longtime aide Jerry Stermer comptroller until Jan. 12
        * Quinn signs law to nix deadline for asbestos lawsuits
        * Quinn to name comptroller replacement this afternoon
        * Madigan says T-Mobile settlement shields consumers

        * Will Kraft's new CEO cut marketing?
        * 10 Things to Do
        * Can Garcia's run for mayor fire up independents?
        * Chicago's newest workout (and personal statement) options
        * A photo shop for photographers


        * Lakeview pot dispensary on hold; Tunney opposes Halsted location
        * Despite community pleas, CPS puts Dyett HS out for proposals
        * Quinn to appoint new Illinois Comptroller today
        * Gov. Quinn appoints longtime aide as Illinois comptroller
        * Watch: President Obama's year-end press conference
        * Rewriting the Sony cyberattack script
        * time for new course in Cuba
        * Are Rahm's numbers creeping up? New internals show him near 50
        * Obama guidance, press schedule, Dec. 19, 2014. Press conference
        * A whole lot of nothing from the City Council


        * 1 killed after shooting leads to police pursuit
        * Man barricades himself inside North Side home
        * 1 dead, 9 wounded in separate West, South side shootings
        * 1 dead, 3 wounded in wrong-way Lake Shore Drive crash
        * Chicago-based Cards Against Humanity doles out pieces of Maine island
        * South Loop crash kills 2, hospitalizes 1
        * Man killed at house party shooting was headed to Army
        * Bronzeville man held on $300K in Loop convenience store robbery
        * Borman Expressway closed in both directions


        * Springfield Schools Are Prepped for PARCC
        * Will Stermer's Promotion Bring A Pension Bump Too?
        * Listen to State Week - December 19, 2014
        * Quinn Picks Budget Chief To Be Temporary Comptroller
        * 'Uber-gentrification' a force in Chicago's West Loop
        * Durbin leaving Congressional roommates behind
        * Worries rise in Russia as ruble falls
        * Improviser finds purpose in Chicago police mental health crisis trainings
        * Chicago 'petcoke' handler says it'll enclose piles
        * Waukegan woman seeks to trademark 'I can't breathe'


        * Quote of the day: Monday, Dec. 22, 2014
        * Raising juror pay gets mixed reviews
        * Gov. Quinn set to go to Maryland to visit soldiers
        * Quote of the day: Sunday, Dec. 21, 2014
        * Bernard Schoenburg: Rauner talks of dogs, housing and the work ahead as governor
        * State treasurer employees get raises, stipends as Rutherford’s term comes to end
        * Cathy Becker: Because it’s the right thing to do
        * T. Ray McJunkins: Justice, righteousness descend to fulfill dream
        * Springfield-based U.S. attorney’s investigations nab 13; race questions raised
        * 2nd Illinois prison with possible chickenpox


        * Sheriff’s Department hunting for drunk drivers over holidays
        * Rain expected Monday; snow in forecast for Tuesday, Christmas Eve
        * Rain, possible slight ice accumulation Monday
        * Area history, Dec. 22, 2014
        * Schools report: Educating you on the happenings in area districts
        * Volunteers sought for county search-and-rescue teams
        * The Future Five, Dec. 22, 2014: Holiday favorites and winter hoops
        * 'I'll take "Dream Come True" for $1,000, Alex'
        * DUN Streator grade school pushes tax referendum
        * CU-CitizensAccess: 'Low priority' STDs beat state average


        * Despite Lions' miscues, Bears fall 20-14
        * National Guard may respond to Milwaukee protests
        * Quinn departs for Maryland to visit soldiers
        * Lake Shore Drive section closed after accident
        * 2 rescued after breaking through ice in Oconomowoc

        * Champaign post office will honor black pol...
        * Illinois Rep. Mike Bost flips his lid over...
        * Cuba could be beneficial for Illinois trade
        * Rep. Mike Bost
        * Last frigate at Naval Station Everett retu...
        * Congressman responds to Sony hack, Cuba's ...
        * Kilquest and Bryant to Face Off for 115th ...
        * Can Congress End the Cuba Embargo? Many Re...
        * Meet Mike Bost, a Must-Watch Freshman Cong...
        * Cuba And Agriculture: What Improved Relati...

        * Durbin on North Korea Hack...

        * Sen. Wicker leads bipartisan group urging ......
        * Ex-General On Benghazi: 'We Should Have Tr......

        * Illinois Watchdog Radio - Live on IR
        * Stantis: Merry Quinnmas
        * Republican analysis calls for Rauner to pick new state comptroller for 4 year term
        * Roskam Issues Letter Urging Obama to Veto Palestinian UN Resolution
        * David Sirota: Rahm exempts city pension deals from ethics rules.
        * I have invented a new verb: “Quazzo.” As in, “Once again, we have been Quazzoed by the Mayor.”
        * Illinois U.S. Sen. Mark Kirk Promises to Screen 'The Interview' at Fundraisers
        * Kirk Calls For Congressional Hearings Into North Korea Hack
        * Quinn calls for special session to push special 2016 comptroller election
        * Americas PAC recaps the 2014 election


        * Governor Quinn Appoints Jerry Stermer as Illinois Comptroller
        * Governor Quinn Calls Legislative Special Session - Governor Urges Legislature to Set Up 2016 Special Election for Comptroller
        * Governor Quinn Announces Illinois’ Unemployment Rate Hits New Low - Illinois’ Economic Comeback Continues; Unemployment Rate Falls to Lowest Level in More than Six Years
        * Illinois Ranks #1 in Volunteer Rate Among the Country’s 8 Largest States - 2.57 Million Illinoisans Give $7.2 Billion in Service
        * Law Enforcement, IDOT Make Final Push to Save Lives in 2014, Roadside Safety Checks Planned Over Holidays - New Episode of “The Driving Dead” Premieres Friday as Holiday Travelers are Reminded to Drive Sober and Buckle Up




            Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller