PERA Retirees Appeal Dismissal of COLA Class Action Lawsuit
The plaintiffs in the civil suit Gary R. Justus et al vs. State of Colorado and Public Employees’ Retirement Association of Colorado et al (Case No.: 2010CV1589) have announced that they will appeal today the June 29th dismissal of their case by Denver District Chief Judge Robert S. Hyatt. The plaintiffs are PERA retirees Gary R. Justus, Kathleen Hopkins, Eugene Halaas and Robert P. Laird. The suit challenged the 2010 action by the Colorado Legislature (Senate Bill 10-001) that eliminated for 2010 the annual benefit increases for retirees (and those eligible to retire) which had been fixed at 3.5% per year (3.25% for Denver School Division), and reduced the increases in future years so that they could be as little as 0% and no more than 2.0%.
In his decision granting defendants their Motion for Summary Judgment, Judge Hyatt distinguished between “a retiree’s contractual right to the base PERA retirement plan benefits” and “a contractual right to a specific or particular COLA.” Hyatt wrote that “there is no contract right to a specific COLA formula frozen at retirement for life.” Hyatt’s ruling effectively permits the legislature to make changes in the COLA at anytime, even reducing it to zero.
Plaintiffs will appeal based on their original claims that settled law by the Colorado Supreme Court clearly determined that COLA is part of a retiree’s contractual right and cannot be reduced. The two major cases plaintiffs cited in this case are:
Police Pension and Relief Bd. of City and County of Denver v. Bills, 148 Colo. 383 (1961)
Police Pension and Relief Bd. of City and County of Denver v. McPhail, 139 Colo. 330 (1959)
Justus explained why this case must go forward. “SB10-001 endangers the economic well being of close to 100,000 retirees.. If this decision stands, then whenever Colorado wants to renege on a contract again, it can now just pass a law changing the terms of that contract. Yet, we can’t renege on our retirements and go back to work for our public employers to make up the difference. Anyone who believes that PERA has secured our vested pension rights is sadly mistaken. PERA is just an instrumentality of the state. If we don’t stop it here, it’s open season on public employees,” he said.
Plaintiffs are represented by Richard Rosenblatt & Associates of Greenwood Village and the Pittsburgh, PA law firm of Stember Feinstein Doyle & Payne.
For more information, visit the website www.SavePERACOLA.com where the court filings and numerous comments by retirees may be found. Save PERA COLA is a non-profit Colorado 501(c)4 corporation that supports the lawsuit. Richard H. Allen is president.
MAINE RETIREES JOIN THE BATTLE AGAINST LEGISLATORS WHO WOULD ABANDON CONTRACT LAW IN THE U.S. – FILE COLA THEFT LAWSUIT IN FEDERAL COURT.
Here’s the news article:
http://www.pressherald.com/news/retirees-group-sues-state-over-benefit-changes_2012-02-14.html
Here’s the retiree association that filed the lawsuit:
http://www.maineretirees.org/mar-suit.htm
. . . . and a PDF of the class action lawsuit itself:
http://www.maineretirees.org/MAR-suit.pdf
ARIZONA AND NEW HAMPSHIRE EMPLOYEE PENSION CONTRIBUTION INCREASES RULED UNCONSTITUTIONAL – (LAST OCTOBER A COLA THEFT LAWSUIT WAS ALSO FILED IN ARIZONA, IT HAS NOT YET BEEN DECIDED.)
Here’s an article on the Arizona pension contribution ruling:
http://www.azcentral.com/news/politics/articles/2012/02/03/20120203arizona-pension-law-ruled-unconstitutional.html
“The reforms increased employee contribution rates from 50 percent to 53 percent of total funding in a move to save the state $60 million.”
“Judge Eileen Willett noted in her ruling that the state Constitution describes the public retirement system as a contractual relationship between the state and its employees and that state statutes forbid laws “impairing the obligation of a contract.”
“When the plaintiffs were hired as teachers, they entered a contractual relationship with the State regarding the public retirement system of which they became members,” Willett wrote. “Their retirement benefits were a valuable part of the consideration offered by their employers upon which the teachers relied when accepting employment.”
Donald Peters, the lead attorney for the teachers, said, “The judge found that the state has to abide by the promises it made to its employees.”
Here’s an article on the New Hampshire pension contribution ruling:
http://www.plansponsor.com/NH_Court_Says_Increasing_State_Employee_Pension_Contributions_Illegal.aspx
Here’s an article on the undecided Arizona COLA theft lawsuit:
http://www.azcentral.com/business/abg/articles/2011/10/06/20111006abg-fischer1006.html
(Note that this COLA theft lawsuit was filed in both state and federal courts, by retired state judges.)
HICKENLOOPER PROPOSES FURTHER THEFT OF CONTRACTED PERA RETIREMENT BENEFITS.
“He said options the state could consider include reducing inflation adjustments for retirees, raising the retirement age for new hires and averaging employees’ last five years of earnings to determine pension payments rather than the last three years.”
See this article in The Pueblo Chieftan:
http://www.chieftain.com/hickenlooper-talks-energy-water-pensions/article_25f92ef8-4ef1-11e1-a99f-001871e3ce6c.html
Hickenlooper appears to have little concept of the state’s legal and moral obligations to the people who have worked long and hard to provide critical services to the people of Colorado.
His CEO mentality that assumes he can sweep away anything he decides upon, at our expense, is imperious, undemocratic and dangerous.
What is happening with last year’s appeal?
Our appeal brief was filed in December and we are awaiting the state and PERA’s response. Then it’s up to the Colorado Court of Appeals to decide whether to remand the issue for trial in the district court.
“Giving a government the ability to renege on a contract at their convenience means the end of any pretense to democracy.” John Bury
http://burypensions.wordpress.com/2011/11/18/lawyers-defining-the-public-good/#more-1602
Update on the Rhode Island COLA theft attempt: Rhode Island’s Treasurer – the state’s proposed COLA theft bill could ultimately be heard by the US Supreme Court.
Here’s the full story:
http://blogs.wpri.com/2011/10/22/raimondo-fires-back-at-fung-says-courts-will-back-pension-bill/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wpri-nesis-notes+%28WPRI.com+Blogs+%C2%BB+Nesi%E2%80%99s+Notes%29
WHAT IS THS SCALE OF THE CRISIS THAT PROMPTED THE COLORADO LEGISLATURE AND PERA TO STEAL RETIREE ASSETS, THEFT OF THE CONTRACTED COLA?
HERE IT IS QUANTIFIED . . . ONE-TENTH OF ONE PERCENT OF FUTURE STATE INCOME.
I just came across this study at the Pension Rights Center, The Origins and Severity of the Public Pension Crisis, produced by the Center for Economic and Policy Research.
Here’s a link:
http://www.cepr.net/documents/publications/pensions-2011-02.pdf
The report states that the shortfalls facing state and local pension plans have been misrepresented. Further, the study notes that, “when expressed relative to the size of their economies, most states are facing shortfalls that appear easily manageable.” For example, unfunded liability as a percent of future state income for the Colorado PERA State Plan is approximately one-tenth of one percent of future state income, 0.09 % (See page 11 of the report.)
NEW BOOK CHRONICLES PRIVATE SECTOR PENSION THEFT.
Retirement Heist, by Ellen Schultz outlines the machinations used to steal private sector retirement benefits in recent decades.
The private sector pension thieves have a kindred spirit in Colorado PERA which, apparently, is seeking to introduce such techniques to public sector pensions. The book is a good read for Colorado PERA members and retirees. See discussion at the burypensions blog, or this review (the book is too technical, but edifying) at the NYT:
http://www.nytimes.com/2011/09/18/business/when-retirees-are-shortchanged-for-corporate-profits.html
RETIREES WIN IN RHODE ISLAND PENSION LAWSUIT, ILLEGAL TO TAKE THE CONTRACTED COLA, EVEN FROM THOSE NOT YET ELIGIBLE TO RETIRE.
Here is an article and the ruling:
http://newsblog.projo.com/2011/09/update-judge-rules-for-ri-unio.html
http://www.projo.com/news/2011/pdf/council94_v%20_carcieri_0913.pdf
“The case law does not preclude but rather supports this Court’s holding that Plaintiffs, as ten-year veterans of the State, possess a contractual relationship with the State pertaining to retirement allowances and COLA benefits which are not subject to collective bargaining.”
ALERT AARP OFFICIALS HAVE DETECTED A THREAT TO PUBLIC PENSIONS!
Here’s an article regarding AARP’s response to proposed pension reforms in Rhode Island. Where have they been in recent years? I don’t recall AARP voicing any objections to Colorado’s COLA theft. If AARP does not defend the rights of retirees, why do they exist?
http://www.projo.com/generalassembly/pension_debate_begins_09-06-11_R2Q3239_v51.6fafa.html
Want to read the New Jersey federal COLA theft lawsuit? Here it is:
http://www.njea.org/njea-media/pdf/2011PensionComplaint.pdf?1315002364319
NEW JERSEY COLA THEFT LAWSUIT FILED IN FEDERAL COURT.
A lawsuit will also be filed in state court shortly.
http://www.nj.com/news/index.ssf/2011/08/nj_unions_public_workers_sue_t.html
PENSION LEGAL EXPERT PROFESSOR AMY MONAHAN ADDRESSES THE COLORADO COLA LAWSUIT.
On Wednesday, August 10, a segment of a conference held by the National Association of State Legislatures addressed financial and legal issues relating to public pensions.
The full agenda for the conference is here:
http://www.ncsl.org/default.aspx?tabid=23366
Professor Amy Monahan, of the University of Minnesota School of Law, discussed these legal issues, and commented on options that states might take before violating contracts. Watch the video here, she is the second speaker, her Colorado COLA comments are about 40 minutes into her talk:
http://www.ncsl.org/?tabid=23412
Here are some notes from her talk.
She raised the issue, “When does the right to a COLA vest?”
She summarized the Colorado and Minnesota rulings in careful language.
She said that the courts are looking at reasonable expectations of pension members to receiving a COLA.
She noted that the ruling in Colorado (and likely the Minnesota ruling) are being appealed, and that it will be awhile for the cases to play out.
She said that Minnesota’s pensions plans were not about to run out of money.
She said that Colorado courts, in the past, have adopted the “California rule” protecting accrued pension rights, including COLAs. The Colorado Supreme Court has signed off on this analysis.
She noted that the Colorado legislature enacted the 3.5% compounding COLA about ten years ago.
She pointed out that the district court ruling in Colorado argued that the COLA has been changed many times in the past, and used this as justification for the SB10-001 change. However, she said that her understanding is that all of these changes that were made in the past to the COLA were beneficial changes for the retirees. (My comment: thus, there was no contract violation from these past changes and these changes cannot be used as a justification for the seizure of accrued, contracted COLA benefits in 2010.)
She is mistaken on one issue raised in Colorado District Court Ruling. She thinks that all of Colorado’s retirees signed a document stating that they understand that the COLA could change. She said that she has not yet been able to get her hands on a copy of this document.
She should be contacted and informed that this is not the case that all retirees signed such documents.
From the question/answer session: She does not know what the obligation of states is in regard to Social Security benefits and pensions, for states that have opted out of Social Security.
Comments on state pension case law: “This area of law is messy.” “The issue of future accruals is not settled.” “There’s room to make arguments on all sides.” “It’s common law, it takes one court to disagree (about the California Rule) . . . that’s the difficulty here.”
I agree that if I had known PERA was in trouble I wouldn’t have retired. However, when I was at the table I was assured everything was secure, no problems, HA! shame on somebody. Now I hear Hic wants a bite at the apple, wasn’t City of Denver retirees enough? May need to start rallying folks.
I want to thank those who are appealing this case I feel they are also doing this for all who pay into Pera as well, one day we all have to retire..
and what is wrong with, Hickenlooper wanting to borrow from PERA
He also needs to be stopped, my money goes into Pera, I don’t want to lend it to him………….
Good!
I’m sending a donation today to help support this appeal.
Thank you to the plaintiffs and everyone who keeps working at this.
Get ready for the Denver Post and KOA to rev up their anti PERA campaigns. SavePERACOLA will need a PR person just to counter the misinformation these organizations will disseminate to stir up anti PERA sentiment. I know as fact, that if I had even the *SLIGHTEST* indication that the ABI would, or could, be cut, or eliminated, I would never have retired. I would have stayed until they had to roll me me out on a gurney, costing my employer thousands. Ironically, when people retire, they save the state a lot of money, because they are at the top of their salary range, and their jobs are filled by workers at the lower end of the scale. Despite this, and the stated ABI commitment, the legislature still felt justified in looting the nominal Annual Benefit Increase and sticking it to PERA retirees. Year after year, and decade after decade, I received glossy mailings from PERA about the security, and sanctity, of PERA retirement – I wish I’d saved every one of them to deliver to Judge Hyatt. Here’s hoping a higher court sees things more favorably.
Ditto! I believe the judge received some of these glossy mailings from PERA showing the security and sanctity of PERA retirement.
Bravo !
Good. I like this. I especially like the part that starts out “Justus explained why this case must go forward. . . ”
How are we doing for funding? I’m ready to donate again. I just makes sense. Please let us know.
Thanks,
–John Kiljan
I have been donating on a regular basis, but once Judge Hyatt ruled against us I quit because I thought that was it. I’m glad to see the appeal and will resume contributing.
Robert Dorsey