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.


* Um, wow
* Tuesday puppy blogging
* A very tough problem to deal with
* Budget stuff
* SUBSCRIBERS ONLY - Supplement to today’s edition
* 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

          
        * HotelTonight Adds New Features For Deeper, Location-Specific Discounts
        * Lockitron Introduces New $99 App-Enabled Smart Deadbolt Lock 'Bolt'
        * Podcast: We all love free stuff
        * Google Fiber expanding to four more cities
        * Twitter gets native video capture, group messaging
        * Apple TV Updated with Sports Illustrated's New 120 SPORTS Channel
        * Apple Tops Smartphone Shipments In China For The First Time, Says Canalys

        * What I Learned About Dealing with People From Playing Games Online
        * Google Fiber coming to four more cities
        * T-Mobile Super Bowl ad entreats us to “Save The Data”
        * What to Expect From Facebook Earnings? Lots and Lots of Mobile Ads.
        * How to Stay Motivated to Keep Brown-Bagging Your Lunch
        * Twitter tries to up its game with group messages and native video
        * Facebook Takes Blame for Service Outages, Which Hit Wider Web

        * White Sox marketing waits for White Sox baseball to cooperate
        * Gillaspie open to whatever role team needs
        * Podcast: MLB pace of play problem
        * 2015 Prospect Watch: Top 10 second basemen
        * Following up: Inside Toronto's failed pursuit of Kenny Williams
        * Trimmer Garcia ready to take off in 2015
        * SoxFest concludes with high hopes for 2015

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


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

        Archives
        January 2015
        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


        * Rauner Says Illinois Going Broke..
        * WATCH: Candidates to meet for Chicago mayoral d.....
        * Rauner Making Himself At Home In Springfield..
        * Governor Rauner to Visit Decatur..
        * Righter seeks changes in Workman’s comp & emplo.....
        * Rauner gets prison deal extension..
        * Rauner: Quinn left state budget in disrepair..
        * Outgoing Illinois Gov. Issues Medical Marijuana.....


        * Time may be running out for Sycamore's penny parking meters
        * Sentencing day for Chicago twins who turned on cartel
        * Longtime Naperville mayor gives last State of City address
        * More than 300 flights canceled at Chicago airports
        * Caterpillar 4Q results mixed, 2015 outlook disappoints
        * Sen. Dick Durbin honors Ernie Banks on Senate Floor
        * Illinois woman steers bus to safety after driver collapses
        * Documents: Quinn had marijuana recommendations, didn't act
        * Rauner replaces appointee who helped give job to Quinn aide
        * Apparent marijuana permit winners want process to proceed

        * Proposed Logan County medical marijuana growing site gets high score
        * Illinois pays millions to keep inmates who can't find homes
        * Proposed Logan County growing site gets high score
        * Rauner replaces appointee who helped give job to Quinn aide
        * Frerichs announces firm will review Treasurer's office
        * State lawmakers consider police reform key issue for General Assembly
        * Statehouse Insider: Gov. Rauner sounding a lot like primary candidate Rauner
        * Veterans voice opinions about future of Oak Ridge war memorial site
        * 85,000 temporary driver's licenses issued to immigrants
        * Proposed Illinois legislation would ban powdered alcohol

        * Caterpillar forecast suffers from falling oil, copper prices
        * Watch McDonald's Super Bowl teaser
        * Walgreens names Boots exec CFO as Pessina tightens grip
        * Mesirow buys Denver insurance firm
        * Rauner lifts spending freeze for road work


          * Google to police: Waze can't track officers' movements
          * City lists 45 'problem landlords'
          * Emanuel, mayoral challengers to face off for first time
          * For second day, thousands of flights canceled, including hundreds in Chicago
          * Sentencing today for twins who flipped on 'El Chapo'
          * Arlington Heights police called many times before woman's hatchet slaying
          * Police warn of robberies in Logan Square
          * Visitation and memorial services set for Ernie Banks
          * Two shot in separate shootings Monday night
          * Boy, 14, shot to death in south suburban Riverdale


          * Political Football With Sports Facilities Agency
          * Governor Unhurt In Chicago Car Accident
          * Hoogland Show Brings Irving Berlin To The Stage
          * Could Rauner's Spending Hold Derail New Train Routes?
          * Ousted State Public Health Director Off To Washington
          * Interview: Combating Systemic Racism In Springfield
          * Proposal Would Ban Conversion Therapy For Minors
          * How food gets the 'Non-GMO' label
          * Quinn had marijuana recommendations, didn't act
          * Lock of Lincoln's Hair Sold For More than $800K


          * Quote of the Day: Tuesday, Jan. 27, 2015
          * Proposed Logan County medical marijuana growing site gets high score
          * Illinois pays millions to keep inmates who can't find homes
          * Rauner replaces appointee who helped give job to Quinn aide
          * Frerichs announces firm will review Treasurer's office
          * U.S. Dick Durbin and U.S. Rep. Aaron Schock: Online sales tax loophole hurting local businesses
          * Quote of the Day: Monday, Jan. 26, 2015
          * State lawmakers consider police reform key issue for General Assembly
          * Our Opinion: Vision should be a key theme in Springfield mayor's race
          * Bernard Schoenburg: Campaign contribution gets them talking in Ward 7


          * City of Murphysboro cancels boil order
          * Plan to downgrade pot punishment being pushed in Springfield
          * Chenoa lifts boil order
          * Davenport police warn of fraudulent camera ticket collection phone scam
          * Davenport police warn of fraudulent camera ticket collection scam
          * Sales tax increase to appear on Franklin County ballot
          * Heaton-Akina
          * Smoke in Alcoa building leads to small evacuation
          * Icy roads wreak havoc
          * American Airlines soaring year removed from bankruptcy


          * Native American TV network gets $6M to expand
          * Amtrak resumes limited service as storm conditions ease
          * Caterpillar 4Q results mixed, 2015 outlook disappoints
          * US stocks slide on weak company earnings, US economic data
          * Sentencing day for Chicago twins who turned on cartel

          * Pro-Amnesty House Republican To Deliver Sp...
          * Former congressman, Northwestern alum Schn...
          * House Passes DHS Funding Bill That Prohibi...
          * House votes to block Obama’s immigration a...
          * Rep. Bob Dold on Congress’ return to work
          * Incumbent spent more than winner in Illino...
          * Dold outspent by $1M, but still won in Ill...
          * Incumbent spent more than winner in Illino...
          * Rep. Bob Dold
          * U.S. reps from suburbs sound off on Obama'...

          * 1st, 2nd Ward Candidates to Debate This Week...
          * Senate's swing-state Republicans break ranks...
          * Durbin lauds 'Mr. Cub' in Senate commemora......

          * Top Democrat tries to slow Iran sanctions ......
          * Democrats say they won't support Iran sanc......
          * Senate's swing-state Republicans break ranks...
          * Iran Wins Sanctions Relief Despite March T......
          * Ranking Democrat on banking panel tries to......

          * Kinzinger blasts Obama Administration's terrorist policy on Fox & Friends
          * The [Tuesday] Papers
          * Human Rights Hotspots: Middle East [video]
          * Human Rights Hotspots: Asia [video]
          * Saving Congress from Itself: Emancipating the States and Empowering their People
          * Illinois Watchdog Radio - Live on IR
          * Legal Marijuana Fastest Growing Industry - and Tax Source - In The U.S.
          * DNA Info: Alderman Wants to Bring Coffee Shops, Bars to Desolate State St. Stretch
          * DCP 9th ward candidates forum...
          * State Rep. Ives Files Legislation in Response to COD President Buyout Deal


          * Rauner announces “Turnaround Team” - Stellar team to help turn Illinois around
          * Commerce Department to Review Proposals for Enterprise Zones - Program Promotes Job Growth in Communities Across the State
          * Governor Rauner signs Executive Order for Minority and Veteran Empowerment
          * Governor Rauner Announces Second Round of Appointments
          * Representative Duckworth, US Army Iraq Veteran Honored With The Abraham Lincoln Veteran Champion Award




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