Posted on 07/01/2011 9:26:16 AM PDT by Qbert
Judges in Colorado and Minnesota have dismissed court challenges by retired public workers whose pensions had been cut — developments that may embolden other states and cities to use pension reductions as a tool to help balance their budgets.
The two lawsuits sought to reverse reductions in the cost-of-living adjustments that Colorado and Minnesota had previously promised to retired public workers. Generally speaking, once lawmakers have agreed to provide certain pension benefits to public workers, it is difficult, if not impossible, to roll them back because of protective language in state laws and constitutions and years of court interpretations.
Public pensions are considered so bulletproof that when the city of Vallejo, Calif., recently restructured its finances in bankruptcy, it cut other costs but left worker pensions intact.
The two court decisions, issued Wednesday, suggest that the legal tide may be changing for public pensioners. The political tide has already turned in some places — in addition to Colorado and Minnesota, South Dakota and New Jersey have also cut cost-of-living benefits for current retirees, and other states have been awaiting legal guidance before doing the same.
In their court filings, retirees in Colorado and Minnesota had argued that their benefits were contractual in nature, and therefore protected by state and federal constitutional language barring the impairment of contracts.
However, in his ruling dismissing the Minnesota case, Judge Gregg E. Johnson of the state’s Second Judicial District Court wrote that the retirees in that state “have not met their burden to show unconstitutionality beyond a reasonable doubt.”
Judge Robert S. Hyatt, a district judge in Denver, offered a different line of thinking, noting that the 2010 state law that cut the benefits did not actually allow the state to remove money from the pension fund and use it to balance the budget.
(Excerpt) Read more at nytimes.com ...
In fact, taxpayers (public employers) are prevented from negotiating with public unions in a meaningful way, so contracts forced upon them are invalid.
The biggest thing to understand here is that the pensions ARE NOT BEING CUT - the Cost of living allowance is being redone. That is what fueled the rulings, and the rulings are correct.
Just as with a private pension, the only thing the retiree is garaunteed is that they will recieve a pension. Yearly increases for public pensions are just gravy.
I am a military retiree, and while I like the idea of annual COLA’s the fact is the only thing I was promised was a % of my final pay. Any raises are completely at the mercy of the rules at that point in time, and I am fine with that.
When there are only so many jelly beans in the jar, the sooner we face up to that reality the better.
how about just delaying govt pensions until age 60?....maybe 62?....you could "retire" at any age but just not collect until that age....
I agree with you; I was just making an observation, not a judgement. Inflation hurts everybody on a fixed income but it would help with state/local pension obligations. On the other hand, the burden on the feds would sore due to their own COLA’s along with debt interest, among other things.
Or maybe eliminating retiring at age 50 for “public safety employees” as is the case here in California. We recently noted that SoCal beach lifeguards are able to “retire” at 50 because they are “public safety” employees by virtue of the fact that they are attached to the local fire departments. What a load of BS! Lounge around on a beach getting a tan and probably all the female companionship you can mange then ride off into the sunset with a muti-hundred thousand dollar a year pension. Way to go public officials! Glad it isn’t your money aren’t you!
I agree with you; I was just making an observation, not a judgement. Inflation hurts everybody on a fixed income but it would help with state/local pension obligations. On the other hand, the burden on the feds would sore due to their own COLA’s along with debt interest, among other things.
Federal employees’ pensions are safe. Unlike states, the federal government can, if necessary, simply print more money to satisfy federal retiree pension and COLA obligations.
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