June 8, 2011 Update

Both PERA and the State have filed briefs in support of their motions for summary judgment in the lawsuit. PERA’s brief is very long and includes many political arguments, whereas the state’s brief simply references PERA’s arguments and reinforces their legal arguments. Read them under the Court Filings and Resources tab at  www.saveperacola.com/resources.  There is no prognosis for when Judge Hyatt might rule on either plaintiffs’ or defendants’ motions for summary judgment. Also pending is the question of how much of the discovery requested by the parties will be required by the court. Again, the court date is set for
February 6, 2012 for a three week trial. Your efforts to identify other retirees and encourage them to support the lawsuit are most welcome. Also, read the article PERA lawsuit moves forward; court date set by Marianne Goodland in the Colorado Statesman at http://www.coloradostatesman.com/content/992838-pera-lawsuit-moves-forward-court-date-set The link is also under Helpful Links at the right side of the website homepage. Have a nice summer and enjoy the 2.0% annual benefit increase that should occur July 31, just 28 months after the last one March 31, 2009. You will then be only 5.12% behind what was promised under previous law.

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8 Responses to June 8, 2011 Update

  1. Mike G says:

    Retirees and future retirees can also make a difference by making sure they don’t feed the public employee vendetta on KOA talk radio (in particular) by patronizing the list of sponsors on their website. I have stopped dealing with a few of them and told them why. The rest I will never deal with anyway, who buys luxury cars on a PERA pension?

  2. I feel the Gov. Hickenlooper has no business using Pera money to fund his projects. We, teachers, state workers, etc. have contributed to our pensions.
    Our pensions are not high. I have to have a second job to make ends meet.

    I intend to call the Colorado state legislators on Monday to express my views and that includes the Governor’s office.

  3. Algy Moncrief says:

    Colorado’s pension debt – middle of the pack.

    The saveperacola lawsuit is mentioned in this new report from Barclays. Note in the appendices that Colorado is in the middle of the pack among states in pension debt. Emphasizes the point that the state’s decision to breach contracts was politically expedient rather than “imperative.” See this link to the report:

    http://www.nasra.org/resources/barclays1105.pdf

  4. ParkerPera says:

    I’ll just speak for myself here…….. I would have accepted a compromise of exactly the same inflation protection that Social Security provides. A 2% cap is far from that. Should inflation pick up for 4 or 5 years, as is very possible at some point in my retirement, we will be crushed under this plan.

    Since the only choices we were given were fighting for the 3.5%, or this plan, we need to fight. What a waste of resources for both sides!

  5. Art Trevethick says:

    There is no room for compromise on this issue. Contracts that have been in place need to be honored. If they can be changed arbitrarily by one side then they are not worth the paper on which they are printed. The fact is that there was no actuarial emergency as Mr. Moncrief so accurately pointed out.

  6. Algy Moncrief says:

    It is sickening to watch the State of Colorado put so much effort into avoiding its debts.
    Here are a few observations about the defendants claims:
    If SB1 was necessary for the survival of the PERA trust funds (when the actuarial funded ratio stood at 69%) how is it that the PERA trust funds not only survived, but flourished, when the funded ratio was much lower (in the low 50s range) during the decade of the 1970s? In the 1970s there was no attempt to breach contracts.
    Essentially, what PERA and the state would like is to be able to underfund the pension, lower the pension’s actuarial funded ratio, and then use the diminished actuarial funded ratio as justification for their breach of contracts. What a tidy and convenient arrangement that would be.
    Colorado law is clear, a 3.5% COLA is due to retirees. The law also states unambiguously that those who have purchased service credit will receive benefits (based on that purchase) that were in effect at the time of the purchase. Many retirees read this unambiguous statute prior to sending money to PERA. Now PERA and the state argue that they should be able to accept the money and ignore their corresponding contractual obligations . . . obligations that could not be stated more clearly in Colorado law. Is this the message that we want to send to future generations in Colorado? The State of Colorado can change the rules in the middle of the game, as it pleases? Public sector contracts are meaningless? If a public sector contract is meaningless, why would any person enter into public service in the future?
    If PERA and the state are successful in their attempt to ignore the clear statutory provisions setting forth the COLA and the benefits to be derived from a service credit purchase, (recognizing that these provisions have the same force and weight as all other statutory pension provisions) then what legitimacy would any other pension provision in Colorado law have? It would render the entire statutory pension scheme meaningless. No prospective public employee could rely on the law when making decisions regarding their financial futures.
    Have you noticed in the briefs that PERA and the state use a funded ratio based on the current market value of assets in an attempt to exaggerate the financial condition of the PERA trust funds? Isn’t it odd that historically PERA has used the actuarial funded ratio which provides a more accurate snapshot of the financial condition of a DB plan? I suppose their hope is that the courts will fail to note the difference between the two.
    PERA points out in their brief that there was testimony in favor of SB1, as if this somehow bolsters their case. Nearly every bill that is considered by a legislative body has testimony in favor of the proposal and against the proposal. This fact has no bearing on the constitutionality of the bill under consideration. Nor does the fact that PERA went on a road trip and heard from the tiny fraction of (brainwashed) PERA retirees that supported the proposal. The constitutionality of legislation does not rest on opinion polls.
    PERA and the state ignored pension reform options that have been adopted in many other states, states with pension actuarial funded ratios lower than Colorado PERA’s actuarial funded ratio. These pension reforms are prospective, legal and moral, and would have provided excellent alternatives to Colorado’s plan to breach contracts. Legislators need look no further than reforms adopted by our neighbor Utah that will prospectively, legally and morally eliminate their pension underfunding in the coming decades.
    PERA notes that it considered many pension reform options. I believe that those reform options that were retroactive in nature, that breached retiree contracts, or were immoral, should have been removed from consideration at the outset.
    During the debate on SB1, PERA stated that it had commissioned a legal opinion from private attorneys and that this opinion supported its case, however, PERA would not release the opinion to the public. Where is this secret legal opinion?
    PERA and the state fail to acknowledge that the legislative record of the debate on SB1 also includes statements from members of the legislature noting that the bill would breach contractual obligations:
    Rep. Lambert: “I have heard from my constituents, as many of you have, that this proposal will breach retiree’s contracts.”
    Rep. Swalm: “We’re breaking new territory in this state by trying to reduce the COLA. We’re probably going to get a lawsuit out of that. If we cut the 3.5 percent COLA there will be a lawsuit.
    Rep. Gerou said that it is a disservice to the state to rush a bill through when her committee knew that it will go to litigation, and said what we are doing to the retirees is wrong.
    Rep. Delgroso said that it is tough for him to tell people that he is going to break their contract.
    Senator Harvey said “We have made a commitment. We have a contract with current retirees. That is already in place. Reforms should be made for new hires. We do not have that commitment to new hires.”
    Senator Spence said “The bill places an unfair burden on retirees.”
    Senator Scheffel said “We are breaching our promises to existing retirees.”
    Senator Lundberg said “This bill is a deal that was cut before this body met.”

    During committee debate on SB1, the Chairman of the House Finance Committee essentially stated that the retiree COLA had to be seized “because that’s where the money is.” Listen to the end of the tape of the House Finance hearing on the bill.
    PERA argues that the 2008 market decline “changed the landscape,” but fails to note the doubling of the S&P 500 since that time. Does the recovery of the equity markets restore the landscape to its former condition? Is PERA arguing that the volatility of markets justifies the breach of contracts? It seems that since PERA employs numerous investment professionals, the PERA board would be aware that equity and debt markets have volatility . . . sometimes extreme volatility. The duty of the board is to prudently manage this risk.
    PERA’s own General Counsel was quoted in a 2008 Denver Post article as follows: “The attorney general’s opinion seems clear that fully vested employees — those retired or with enough years of service to retire — cannot see any benefits reduced, including cost-of-living adjustments, Smith said.” Why would Smith state that an action is illegal, and then decide to champion that action in the following year? Sounds quite fickle. I believe that when he made this comment n 2008 he was thinking quite clearly.
    PERA has been disingenuous by claiming that SB1 represented “shared sacrifice” among employees, employers, and retirees, by not making it clear that retirees bear most of the burden of their proposed reforms, for many retirees the confiscation of benefits will reach one-quarter of their total retirement benefits received over the rest of their lives. In debate, the bill’s sponsors said that retirees would bear 90 percent of the cost of the reform.
    Shouldn’t the fact that SB1 was adopted by the House of Representatives on slim margins have given pause to Governor Ritter regarding its constitutionality? Did Ritter or the legislature consult in-house counsel regarding the constitutionality of SB1? If so, let’s see their opinions. If the Governor or legislature did not consult in-house counsel on such a momentous question as this, then why are such attorneys employed in their offices?
    Bottom line . . .some public sector expenditures are discretionary on the part of legislative bodies . . . expenditures to meet contractual obligations are not among these.

    • jibb says:

      Please keep in mind the KISS priciple when you post……your long winded responses are a chore to get through……Be brief and learn how to edit…..we all would appreciate it Shakespeare!!!!

  7. William says:

    After reading both sides I hope that a reasonable compromise can be struck. It is important to watch the status of the other state cases as well. I think we are in for a long and drawn out litigation on this not only here but nationally. Given the state of the economy I guess the question will remain what is a reasonable compromise, if any.

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