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
* *** UPDATED *** THIS JUST IN... Judge orders permanent stay on pension law
* Today's number: 10 percent
* Unclear on the concept
* Could be a big day
* Question of the day
* Illinois leaders react to Obama's immigration order
* TrackBill – An Introduction
* Caption contest!
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* 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

          
        * Apple Watch price, Lollipop updates, MS Office mobile comments & more – Pocketnow Daily Recap
        * Google’s Nexus 6 Might Be Too Big For Right Now, But Right-Sized For The Future
        * You Should Play: Monster Strike is a delightful mashup of monster battles and pinball
        * HTC Desire Eye Review: Welcome to the (selfie) machine
        * The Week in iPad Cases: Extra storage, ultra rugged, and everything in between
        * Apple's $450 million e-books settlement gets final approval
        * Do you really care about health tracking wearables?

        * Lenovo REACHit Pulls All Your Files Into One Place
        * Philips Puts Their New SlimStyle Light Bulb On a Diet
        * Show us your best Grumpy Cat scowl
        * This Week's Top Downloads
        * These are the tablets to put on your Black Friday hit list
        * Have Kids Find the “Bargain Price” to Teach Them About Money
        * Technology set journalism free, now new platforms are in control

        * With LaRoche on board, Abreu will benefit
        * Sources: White Sox land LaRoche with two-year deal
        * Sources: White Sox land LaRoche with two-year deal
        * Sources: White Sox land LaRoche with two-year deal
        * Abreu will benefit from LaRoche's presence
        * White Sox sign Adam LaRoche to two-year, $25 million deal
        * Sources: White Sox land LaRoche with two-year deal

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


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

        Archives
        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


        * 'Hoops for Peace' tournament aims to curb viole.....
        * Money cant buy Christie love - Politico..
        * Illinois' Rauner tackles full transition agenda.....
        * Blackhawks crush Oilers..
        * Rauner Says Financial Condition "Horrible"..
        * Bruce Rauner tackles full agenda in transition .....
        * Children's Theater Project Lands $5 Million Sta.....


        * Illinois' Rauner tackles full transition agenda
        * Immigrants urged to take advantage of Obama action
        * Door County fish business subject of federal probe
        * Springfield firefighter arrested for wielding gun
        * Pekin man sentenced for dealing deadly heroin
        * Attorney general warns of immigration scams
        * Suspect in 2011 slaying enters guilty plea
        * New study shows impact of military in Illinois
        * Congressman says he still deciding what to do next
        * Judge rules Illinois pension law unconstitutional

        * Rauner tackles transition agenda
        * Attorney general warns of immigration scams
        * State pension changes ruled unconstitutional; appeal to Illinois Supreme Court next
        * State to refund $60 million in retiree health care money
        * State pension changes ruled unconstitutional; appeal to Illinois Supreme Court likely
        * Illinois pension case likely headed to high court
        * Judge: Pension ruling to come Friday
        * Rauner mum on fixes for ‘dire’ state finances, wants Quinn to freeze hiring
        * Rauner mum on fixes for ‘dire’ state finances
        * Judge to hear pension law arguments today

        * AndroGel giving AbbVie performance anxiety
        * Turning the kitchen into a tech hot spot
        * What does Michael Madigan do next?
        * Are Chicago's manufacturing districts vulnerable?
        * United's Smisek back in analysts' good graces


        * University of Chicago’s Dr. Donald F. Steiner, pioneer in diabetes research, dead at 84
        * University of Chicago’s Dr. Donald F. Steiner, pioneer in diabetes research, dead at 84
        * University of Chicago’s Dr. Donald F. Steiner, pioneer in diabetes research, dead at 84
        * University of Chicago’s Dr. Donald F. Steiner, pioneer in diabetes research, dead at 84
        * Police: Girl, 10, struck by drunk driver who fled scene
        * Business owners seeking pot shop licenses in Illinois faced lawsuits elsewhere
        * Time for all-new plan on pensions
        * Illinois pension reform law is unconstitutional, judge rules
        * Dr. Lawrence Solomon: Renowned dermatologist, book collector loved a mystery
        * 3 Daley scandals cost Chicago taxpayers over $6 million


        * 5 injured in shootings, including 2 teens, on South, West side
        * Mag Mile Lights Festival: 'Nice to start the holiday season'
        * Teens address top city issues at annual speech competition
        * Emanuel: 'What the president did was create an opportunity'
        * $900K bail for man accused in fatal East Hyde Park shooting
        * Impaired Divvy bicyclist hit by 2 cars on Lake Shore Drive
        * Tourist robbed at gunpoint near Buckingham Fountain
        * Slain woman was thoughtful colleague, co-workers say
        * 3 charged with gun, drug offenses in Beach Park


        * Listen to State Week - November 21, 2014
        * State To Refund Retiree Health Care Money
        * Labor unions celebrate judge's ruling against Illinois pension law
        * Judge Finds Reductions In Pension Benefits Unconstitutional
        * Pension Ruling Imminent
        * Hoosiers divided over Obama’s executive action on immigration
        * Illinois Symphony Orchestra Joins The Circus For Holiday Pops
        * School Funding Testimony Taken At Capitol
        * Incoming U of I President Speaks To Springfield Audience
        * To Restore Executive Mansion, Rauner Plans Private Funds


        * Our Opinion: Illiana project too risky for tapped-out Illinois
        * Bernard Schoenburg: Sen. Manar backs aide Watson over Cahnman, Proctor in Ward 5
        * Karen Cox: Shop for a cause
        * Andy Shaw: Protect Illinois’ FOIA law from unnecessary tinkering
        * Quote of the Day: Sunday, Nov. 23, 2014
        * Rauner tackles transition agenda
        * Attorney general warns of immigration scams
        * Deckle McLean: Plagiarism comes with a price
        * Charles Krauthammer: The climate pact swindle
        * Quote of the Day: Nov. 22, 2014


        * Families find purpose in their children's tragic deaths
        * State reforms teacher evaluation system
        * Thanksgiving Herald & Review delivers the deals
        * Golconda celebrates deer season
        * Thanksgiving paper stuffed with value
        * Deadlines set for BND subscription changes during Thanksgiving week.
        * N-G Preseason Top 5: Central No. 2
        * Illini Legends, Lists and Lore: Happy 67th birthday, Jimmy Collins!
        * Rajic, Fletcher finish state final runs
        * WBB Game 4 preview: vs. Southern


        * Families get coats, food from Lake Zurich church
        * Minnesota survives test from UMBC
        * Rhode Island upsets No. 21 Nebraska
        * Freshman leads Indiana past Lamar, 85-72
        * Fremd rolls past Cary-Grove at Lakes

        * Patrick Cannon defense strategy rare but n...
        * Feds fine Jesse Jackson Jr.'s campaign com...
        * Ex-Congressman Jesse Jackson Jr. faces sen...
        * Representative Jan Schakowsky Sends Letter...
        * Rep. candidate pushes to uphold marriage b...
        * Reps. Schakowsky and Waxman Introduce Bill...
        * Statement by Representative Jan Schakowsky...
        * U.S. House Passes Resolution Condemning An...
        * FAA Rejects Call For New O'Hare Noise Stud...
        * Representatives Quigley, Duckworth, Schako...

        * Guest lineups for the Sunday news shows...
        * Conflict mineral law update and the war in......
        * Conflict mineral law update and the war in......
        * Conflict mineral law update and the war in......
        * Conflict mineral law update and the war in......

        * Algonquin chief recommended to be next U.S......
        * GOP senator: 'Hopefully we'll get a seriou......

        * Tower of Power
        * Tribune: 'Vulnerable' cafe makes a stand in a tough part of town
        * Duckworth-Bowlsbey welcome new baby girl
        * WWI-themed Christmas ad goes viral
        * State Rep. Andre Thapedi HR1348 Press ReleaseClir
        * State Rep. Andre Thapedi HR1348 Press Release
        * Going to GRI in Peoria? Find session schedules #ILGRIturns50
        * IAR Government Affairs monitors veto session
        * Coming Thursday: Illinois October Home Sales Report
        * Infographic: October Illinois Housing Snapshot #IARMarketStats


        * Illinois Residents Asked to Put the Tobacco Down - Support the Great American Smokeout – November 20
        * Governor Quinn Statement on President Obama’s Executive Action
        * Governor Quinn Statement on Selection of New University of Illinois President
        * Governor Quinn Statement on Senate Committee Passage of Minimum Wage Legislation
        * Governor Quinn Statement on the Installation of Archbishop Blase Cupich




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