Contribute now to support the lawsuit!

Save PERA COLA is now actively seeking your contributions to fund the class action lawsuit Gary Justus and Kathleen Hopkins v. the State of Colorado and Colorado PERA et al. filed February 26 in state District Court in Denver. It will require the significant support of retirees, those eligible to retire, and other interested parties to overturn the parts of Senate Bill 1 that violate our contract with PERA by reducing the guaranteed annual benefit increases from 3.5% (3.25% Denver schools division) to zero in 2010, and 2% or less thereafter. The suit also seeks to overturn the portion of the law that sets back any future increases four months from March to July. The suit asks the court to certify a class of PERA members “who became eligible to retire or who retired between March 1, 1994 and February 28, 2010, or who are ‘survivors’ of such retirees.”

The plaintiffs have retained a Pennsylvania law firm experienced in public pension litigation, Stember, Feinstein, Doyle & Payne, LLC, as well as the Colorado-based Richard Rosenblatt and Associates. Stephen Pincus, Esq., William T. Payne, Esq., and John Stember, Esq. will be the lead attorneys.

While the State of Colorado has public tax dollars to defend itself through the Colorado Attorney General’s Office, we must rely on cash donations primarily from PERA members who will already be feeling the inflationary effects on their benefits. Ironically, PERA will also be using its members’ assets to oppose its members’ interests.  It will perhaps take several years for a final answer from the only branch of government left that can afford us a level playing field to decide this issue.

This will likely be our only opportunity to challenge Senate Bill 1. If it is allowed to stand as written, it sets an incredibly powerful precedent for future reductions in PERA retirees’ fully vested benefits when the state again feels the need to find more money. Other public pensions in Colorado will not be immune, and the precedent for attacking public retirees’ pensions here will embolden other states to try the same.

Over the course of the next 30 years, the purchasing power of PERA retirees’ benefits will be cut progressively downward 38% (Denver 33%) compared to pre-SB1 guarantees. For every $1000 of monthly benefit a retiree receives today, he or she will not receive $154,336 (DPS $127,105) in contractually guaranteed cumulative benefits due to SB1. This is why Senator Josh Penry (R-Grand Junction) stated “Fully 90 percent of the PERA fix comes from benefit cuts to current and future retirees…”

Save PERA COLA is a Colorado corporation registered with the Colorado Secretary of State. SPC has applied for designation with the IRS as a 501(c)(4) non-profit corporation that is eligible to receive donations that are not tax-deductible.  All funds will be deposited into SPC’s Westerra Credit Union checking account by Treasurer Judy Ganschaw. Donations will be used exclusively for funding the lawsuit. Upon final adjudication by the courts, any excess funds collected will be returned to donors on a pro rata basis upon request.

Your participation in this effort is crucial to its success. Some retirees receive much less in pension benefits than you and I, and can give little or none. Food and medicine are their first priorities. They rely on the 3.5% to just survive. Others of us can do more and we will. Please search within and find what your part will be in solving this problem that has been thrust upon us by PERA, the General Assembly and Governor Ritter.

You may donate at our website using PayPal, a secure online payment service, or by mailing a check to:

Save PERA COLA
c/o Judy Ganschaw, Treasurer
3241 S. Josephine St.
Denver, CO 80210
Or make a donation using Paypal:
 Note that if you use Paypal, we will be charged a 2.9% fee, plus $.30 per transaction. For larger donations, sending us a check will avoid this fee.

Donations will be acknowledged if contact information is provided. Please include address, phone number, email and PERA division (school, DPS, state, judicial, or local government). Please indicate whether or not we can publish your name and division as a supporter of the lawsuit on our website.

Thank you for your support of all kinds in this effort. It is greatly appreciated and highly necessary.

Gary Justus and Rich Allen

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57 Responses to Contribute now to support the lawsuit!

  1. Greg says:

    Why should current State employees continue to be laid off and continue to take salary decreases (2.5% FY11 & 4.5% FY12) in order to fund their portion of PERA, but retirees can’t share some of the burden? I wish none of us had to be affected by our national economic crisis, but to think that Retiree’s can’t contribute to the situation makes me feel that you all are just selfish. I thought the Bill passed last year that changed the way COLA works, is really fair, its based on inflation. To think that current employees haven’t had a COL increase in 3 or 4 years, and are taking a pay cut for last 2 years, and you all get 3% no matter what…this lawsuit is distugsting!

    • saveperacola says:

      It is foremost a constitutional issue, such that if the law is sustained in court, then the state will come back over and over again to cut their employer contributions to PERA. Secondly, it is a financial issue in that each year retirees’ purchasing power is reduced more and more. That’s a 2% maxiumum per year increase, not 3 % as you are thinking. If PERA ever has negative investment earnings in a given year, it triggers the next three years to be the lower of CPI-W or 2%. Currenly employed PERA members have the choice of leaving public employment for the private sector. Retirees do not have the option of resuming their careers and making up for the difference. There were sound alternatives to Senate Bill 1 which PERA and the Legislature artfully ignored. Most importantly though, are we to ignore the constitution? Not wise.

      • DFD says:

        Thank you SAVE PERA COLA for this answer.

        PERA and Colorado did not ask for our cooperation in this fiscal crisis they chose to violate a contract. The meetings held throughout the state by PERA preceding SB 10-001 did not seriously address any remedy save the PERA favored 2-2-2 response. 2-2-2 has been shown to impose a disproportionate burden upon annuitant.

        Perhaps had the annuitants been contacted as a group and requested to forgo our annual increase, or accept a diminished annual increase, for a defined, finite, period of time the outcome(s) may have been different. Annuitants are not ignorant of, nor insensitive to, the financial issues facing PERA, we simply do not desire to forever lose benefits we earned during our long service to the citizens of Colorado.

        There were no secrets meetings nor conspiracies present when our elected representatives publicly debated and the passed into law the annual increase. The fact that the current economic situation makes the annual increase appear as largess is a temporary and short lived phenomena. The predicted inflation that is a current topic of discussion will find the 3.5% annual increase wanting in meeting the annuitant’s needs. I would also note that when our non-PERA friends and associates were experiencing annual growth far in excess of 3.5% there was no movement to share the prosperity with us.

        As pointed out in other responses present in the site, the 2008 economic downturn was not a major event in the stability of PERA. PERA was in long decline when that crisis occurred. The decline of PERA was caused by mismanagement in providing early retirements, matching 401K contributions, fire sale rates for purchased service credit and the failure of Colorado to fully fund their contribution. Colorado and the legislature created their own exigencies and now want to violate Constitutional contract law to correct their mistakes.
        Our attorneys seem to be saying that we do not dispute that at some point the state may cancel or invalidate the annual increase as a fiscal necessity/emergency. Our attorneys contend that this worst case, albeit unconstitutional, response/scenario cannot be the initial answer to this or any crisis.

        One aspect of the scope of options available to PERA and Colorado has now been placed into public view in the form of the increased burden being placed upon Colorado employees. Colorado levied an additional 2.5% (of the Colorado government portion) PERA contribution on state employees for fiscal year 2010-2011 and there is a bill pending in the legislature to extend this levy for fiscal year 2011-2012. Governor Hickenlooper now proposes an additional 2.0% levy, for a total burden of 4.5%, in the 2011-2012 budget. There has been no proposal, nor to my knowledge any discussion, of the state paying back the contributions forced upon the employees and there exists a reasonable expectation that some form of this increased burden may continue to bring relief to the state budget for the long term.

        Why is it that when the state needs immediate relief a viable response instantaneously appears? This type of response, with Colorado assuming their proper PERA contribution, would have provided immediate and long term stability to the health of PERA.

        Obviously the State of Colorado continues avoid their responsibility in funding PERA and their accountability in the fiscal standing of PERA. This manufactured impending crisis will continue until the state meets their obligations/promises to their mandated retirement program.

        This may also be the time to ask questions about the movement to allow states to declare some form of bankruptcy in response to the debt crisis. The state of Colorado, in accordance with its own Constitution, must have a balanced budget. PERA, by their own statements, does not face liquidity issues until at least the next decade. I am not in favor of ignoring the issues, I only request that we address the solution equally. It seems that there current dilemma is largely funding issue not a spending issue.

        In discussing PERA with others I am often informed that times and finances change and it is only reasonable that we (annuitants) accept the negative consequences of the current downturn. I submit to you that this crisis will pass, PERA health will return and the private sector will again surpass Colorado employees in wages and benefits. This issue is one of integrity. The State and citizens of Colorado imposed a retirement system on its employees and benefited from the years of service provided by those same employees. To turn your/our backs on those obligations is unconscionable.

        If one were to impose the same response to other current or near current events we would have agreed to increase interest on existing mortgages when the housing industry was in peril. We would return and pay full MSRP on GM and Chrysler vehicles as they really were not wise to let them go at less than cost. We would bail out the banks for their unwise fiscal decision.. Oh wait, we did that didn’t we?

    • Barry Thorpe says:

      Greg:
      Using your line of reasoning, why don’t we all just adjust our mortgages down by a few points to save money…..maybe you could take your mortgage contract, or personal loans, or utilities and various other legally binding contracts and simply modify to help your financial picture.You would expect the holders of those contracts just to “contribute” by allowing you out of your contractual obligations ? Well, good luck with that ! The lawsuit is far from disgusting, it is a critical test of the rule of law, and the validity of contractual law which may have generational impact.
      Colorado PERA must honor fully vested benefits, modify for the future as needed, but must NEVER be allowed to rescind earned compensation. Barry Thorpe

  2. Barry Thorpe says:

    Recently attended a “shareholders” meeting…….Meredith and company sure bristled when I asked why they are now calling the Annual Increase a “COLA” . Seems back at some earlier time it was a COLA but then changed when no longer tied to any economic index. The answer was, obviously unsatisfactory. I notice that he called it an annual increase in the latest newsletter. On another note, we asked if they thought it would have been prudent to tell retirees BEFORE they retired that parts of their agreement were subject to unilateral change….no answer, Also no answer to the question, “What in the world does ‘vested’ mean?

    • saveperacola says:

      Thank you for this report. By pushing the issue of not using the term “COLA,” you may have turned PERA toward using the proper term “annual benefit increases,” (ABI) which we always use now except for the name of our group, website and email, which are not possible to change at this point. The ‘no answers’ to serious questions provides in itself some insight into PERA thinking.

  3. Myron C. Baker says:

    I too would have put off retirement from Colorado State University had I known PERA was able, so easily, to go back on what I read in the PERA handbook at the time I was considering retiring. PERA seems to be acting more like a large corporation intent on screwing the working class, than like an outfit that is supposed to help Colorado state retirees in their waning years. It’s all pretty depressing. I hope something comes of the lawsuit. I can’t send much, but I will send something to help with costs.

  4. Wanda L says:

    I wish I had the crystal ball that would have warned me not to retire. If I go back to work anywhere today I get taxed against a salary for which i will not receive a pension. Not SS and not Pera. I love the folks who tell me to go back to work….so I can contribute to their pension without benefit to me! I am moving out of the US to hopefully teach English in a salary system that isn’t recognized here to try to buy essentials. Retirement indeed. PHAH.
    Checks in the mail.
    If the retirees are so much of a problem-why not simply fire all state/muni/school/justice workers and let the public be damned. Want to solve the problem? yeah that’ll do it.

  5. John says:

    I think if you look further you will see that the banking crisis is an excuse for, not a cause of, the reduction in the benefit. Discussion of the need for a reduction in benefits well pre-dates the current crisis, and the form of PERA’s action corresponds to what was proposed as early as 2005. Elsewhere on this website are some links to that earlier discussion.

    There are a number of catalysts at work, not least being an entry from the auditors in the 2008 financial report stating the state was delinquent in its duty regarding adequate payment. PERA, and by extension the state, even with sovereign immunity, still has some fiduciary responsibility. When your own hired auditors start calling you out, your ability to avoid liability gets thin.

    The state does not have, and won’t for any foreseeable future, the +$2 Billion they need to makeup their shortfall. As others have noted here, they consider the cut in benefits ‘found money’. Pull this off, and they can represent themselves as courageous, making the hard decisions, especially if they can avoid having to answer for it.

    Sadly, the solution embraced simply is a cynical decision to exploit a bad situation to avoid more honest discussion on state finances. Avoid calling anything you do to increase revenue a tax, and you haven’t raised taxes. Avoid calling it a benefit, and you haven’t reduced benefits. Deny having a contractual relationship and you haven’t breached the contract. It’s the sad old joke – Who do you believe, me, or your lying eyes?

    I’ve spent a fair amount of time trying to understand how the state [country] arrived at this point. I’ve known more that a few members of the legislature personally for years; a couple since childhood. How did our Democracy become so pathetic. At the end of the day, you arrive at the conclusion that you simply can’t trust this bunch. Hopefully, we are still a nation of laws, not men, and possessed of judges dedicated to that.

    • Tim Hansford says:

      Amen to that. My hope is that the judges will be willing to see through the smokescreen of arguments that PERA has made about “actuarial emergency” and see this as the breach of contract that it is.

  6. Barry Thorpe says:

    Thanks for this website and the chance to contribute. I would suggest that the 3.5% annual increase not continue to be referred to as a “COLA”. My reason is that in making an argument to retain a contractual benefit,it sends the wrong message to the public to call this a COLA. In hard times, when the CPI might be low or even negative, the average person might expect a “Cost of living Adjustment” to fluctuate. If you look at the benefit plan brochure (I’m looking at 2000 qnd 2001), the 3.5% annual increase is never referred to as a “cost of living adjustment”. It is an “annual increase because OUR money is earning interest, and has been doing so for 30 years. Nowhere will you find language that it could be tied to inflation, CPI or anything else. It’s a benefit, no less contractually sound than the 75% of HAS. I know this may be a semantic distinction in some ways, but it is a critical distinction nonetheless.
    Any judge who may rule on this must know that virtually none of us would have taken the package from PERA if the benefit was in question. I could still be working, but made a decision based on a legal contract. In addition in order to take the “deal” I spent 401K money on buying service credit, SPECIFICALLY because I could make up for the expense over a fer years time by the application of the annual increase.

    • Mike G says:

      I couldn’t agree more. I never heard the word “COLA” my entire 25 year career. About two years ago, after I retired, the legislature morphed the contractual annual increase into a “COLA”, linking it to a cost of living index. This allowed them to turn the tide of public opinion against PERA retirees because they could say the contracted 3.5% may be more than actual increases in cost of living, “and that’s not fair” (in their best Andy Rooney voice). Local newspapers and pundits joined the chorus. Diabolical. I need my job back. I would never have retired had PERA been presented as anything but rock solid, or had I witnessed anything to the contrary. The way this will affect my survivor is especially disconcerting, because of the way they wrote the bill, I doubt there will be many 2% “COLA” payouts, if any. Those that have been retired a while at least got a few increases, or perhaps reached their HAS. Those who are newly retired, and were depending on some increases, are screwed. Now, because of the bill, if I go back to work for a public agency, I would have to pay into PERA, with no benefit from it. If I go to work in the private sector, I would pay into SS, with no benefit from it (because of PERA). CATCH-22. It appears they have decided that PERA retirees are a cash cow to rob at will. It’s particularly sickening because the legislature repeatedly manipulated the salary survey methodology my entire career to lower wages, delayed or froze mandated pay increases, changed classifications to cut wages, ignored benefits disparities, and now this. I feel like a dope for working the best years of my life for this state.

  7. Doug Frank says:

    I figured in the 3.5% yearly increase very carefully when I retired from State service. If I knew this was the deal now with PERA, I would not have retired at all and stayed working until I was 90 years old! This is complete highway robbery and is very disgusting to me, to tell you the truth. PERA said over and over again that they had these retirement plans all figured out and are all vested, even in bad years of investing. Somebody should be held accountable for this type of behavior. I don’t have any trust in anything any more to tell you the truth.This State is going to hell in a hand basket.

  8. John says:

    I am unfamiliar with the costs associated with PayPal when used to make contributions. I believe it runs something on the order of 3% when used in a retail situation, but maybe less(?) when used to make contributions. I can write a check, I can use my PayPal account. Which do you prefer?

  9. Tim Hansford says:

    Thank you for filing the lawsuit, and for this website. Having followed the SB1 legislation through the various committees and votes in the Senate and House, I believe that the legislature was fully aware at every step that this law would not pass a constitutional test, but they were convinced that they had to do something to save PERA, and passing this appears to do that and at the same time makes them look good to the rest of the state. Unfortunately for them, laws have to also be legal, and this just cannot possibly be legal.

    When I spent my life savings to purchase previous years of service in 2004, I did so with the understanding that when retirement came, the benefit would be increased at a fixed rate of 3.5%. I weighed the promise of a fixed rate increase against the very real possibility of making more with other investments in good years, and less in bad years. I decided on the safer “guaranteed” rate vs. a variable rate that had as much chance of being higher as lower, but with more risk.

    I think that PERA has an obligation to uphold their part of the contract with retirees, just as I have honored my part. I am sending a check to Save PERA COLA today that is half of the amount of my monthly benefit. If this lawsuit is not won, the gates are open for any kind of reduction,
    even elimination, of our benefits in the future whenever a legislature perceives an economic emergency and needs PERA money to balance the budget.

    Thank you again for taking up this cause.

    • saveperacola says:

      Thank you for your sacrifice to help us carry this lawsuit through to the end. As we learn of court dates, etc. we will notify you here and by email. Fundraising is going well as more and more affected PERA members learn of our lawsuit, but we still have a long way to go. No funds donated for the lawsuit will be used for anything except paying the law firm’s costs and fees. After the final court actions, any excess funds will be returned to donors on a pro rata basis.

  10. Ken says:

    Just a quick followup to my post earlier today.

    If the US (or Colorado) Supreme Court sides with Save PERA COLA, my suggestion would be to preserve SB10-001 with the condition that the 3.5% COLA is preserved for the subgroup of PERA members (or full retirement-eligible) who retired post-1994 and before March 1, 2010. This 1.5% (or greater) COLA payment can easily be calculated and budgeted each year from the state’s general fund without asking for additional taxes.

    Again, I assert that the legislature can satisfy the plaintiffs’ contract without increasing taxes or violating TABOR by removing sales, use and business tax exemptions to various special interests and closing certain loopholes. There are currently over $2 billion in tax exemptions, and the Old Age Pension Program loophole currently costs the state over $25 million per year.

    Thus, the courts could modify SB-1 as I’ve stipulated above, while PERA’s 2/2/2 Plus Plan would be maintained without modification. This would set a path for the trust fund to be 100% funded within 30 years, and also the property and contractual legal rights of current retirees would be honored. For example, the 3.5% COLA this year is worth $80M. A 1.5% ad hoc COLA would be $24M. Surely, an ad hoc COLA can be budgeted in addition to the PERA reform found in SB-1.

  11. Ken says:

    In modifying the fixed, statutory 3.5% COLA, Colorado has become the first state to lower vested benefits to current retirees. The PERA Board of Trustees, the State Legislature, Governor Ritter, organized employee/retiree groups (such as Friends of PERA, Secure PERA, Colorado WINS, and CSPERA), and collaborative retirees have all, to various degrees, grudgingly agreed to SB10-001.

    One may ask why all the profound pragmatism here in Colorado, where a long-standing COLA contract with retirees is being broken with impunity? Why the capitulation? The simple answer is TABOR (see my earlier post on March 15).

    A popular democracy makes it nearly impossible to honor contract rights (indeed, property rights), especially to an enviable group such as PERA retirees. All the above parties must pragmatically realize that the legislature will never provide adequate, actuarially sound employer funding to PERA.

    I strongly believe that this capitulation of employee and retiree groups, along with the PERA board, would not happen in the other 47 states with a defined benefit plan, especially in the other 6 states whose employees do not participate in Social Security. Alaska and Michigan have defined contribution plans.

    The Save PERA COLA class-action lawsuit will probably need to be settled by the US Supreme Court, as the Colorado Supreme Court justices will recuse themselves. Also, a precedent needs to be decided in how to proceed in honoring the contract and property rights of public pension beneficiaries.

    The amended complaint is excellently crafted to include the “takings” clause in the US Constitution. Just 10 years ago, the state legislature simultaneously lowered its PERA contribution and distributed TABOR rebates. Was this just a coincidence?

    A successful lawsuit may be a hollow victory, as how would the plaintiffs collect? The only way the state legislature could satisfy a judgement would be to put the retiree COLA at the top of the list of state expenditures.

    My suggestion to the US (or Colorado) supremes would be to accept SB-1 in its current form (2% COLA), but to have the post-1994 retirees receive an additional 1.5% directly from the state’s general fund each year. This solution would be fair to un-retired, but vested PERA members, and would also satisfy the contract rights of current PERA retirees. This annual expediture should have priority over other budget items and rebates.

    • Barry Thorpe says:

      These are workable suggestions, focused on how the State might pay if we should win. I want to respectfully suggest however, that solutions to the State’s obligations are simply nor our problem. The overarching issue is not the dollars and cents and how to come up with them, but the very foundation of contract law !. Services were performed under a contract with specific performance tied to specific compensation. The beneficiaries of the services bear the burden on contractual obligation, so there is nothing in Tabor , or anywhere else that provides an “out” for PERA and the State. I am also weary of the notion that PERA must be “fully funded” with only employee monies coming in……The reason that revenues don’t match up with funding obligations is the concerted effort throughout PERA history to keep a lid on salary ! Raise salaries, then take the % needed to:
      1.provide a living wage & 2. allow retirement system contribution.
      This can only happen when there is a State salary schedule, and taxpayers are educated about the real value of our work as educators.
      Until contracts are considered inviolate, no temporary solution makes sense.

  12. John Makar says:

    I’m very glad that this website exists, if only for my own sanity. I think the points of law are fairly obvious, and have been all along. PERA even at one point acknowledged them, and there I begin to have my problem with them.

    PERA in its various literature out when I retired made much of the existence of the 3.5%, even arguing that it made PERA superior to insurance annuities. It was an inducement to create an annuity contract relationship with them.

    They are now essentially arguing that no contract condition exists. Really, that is what this comes down to. There is no ambiguity in the U.S. Constitution as to the prohibitions with the states and contracts, the language is essentially duplicated in the state constitution, so PERA’s point really is that a contractual condition does not exist. If they prevail on that, there is no limit.

    I think what concerns me most is the barefaced attempt to ignore the ambiguity of their action. Both PERA and the legislature have rationalized it on the basis of ‘a greater good’, and have no concern as to the broader implications as to the rule of law. How a greater good can exist and continue in that condition does not seem to be their concern.

    They simply cannot be trusted on the basis of that.

    • Barry Thorpe says:

      And let’s not forget the inducement to spend our 401K money to buy service credit at rates far exceeding what those years actual cost would have been if we had paid for them at the time. I’ve seen no accounting for the millions of dollars that PERA lured out of 401Ks to buy credit from experience in other states. I taught 4 years before coming here in 1979, I paid a fortune for those years in 1999 directly to PERA….CHA CHING !
      Yep, it was MY choice, but it was based in repayment of the cost by “accepting” a contract for an annual 3.5% increase……..a contract susequently breached.
      If this is allowed to stand I want to know: what contract, anywhere, anytime is to be trusted ?
      Am I obligated to pay state income tax ? My mortgage, Auto loan? etc… More foreboding, why should they continue to pay the 75% of HAS at all ??
      If our society is to be a civilized nation of laws, contracts must be binding.

  13. Gary Strobridge says:

    I too believe in my heart of hearts that we must prevail in this lawsuit or we can wave good-bye to PERA forever. They will cut direct benefits if their law allows . Please help to prevail in our lawsuit by contributing what you can . I worked in the State Division for a very long time and gave the State my youth and would really appreciate them having to keep their word during my retirement and give me the benefits I was awarded upon retirement in the year 2000.

  14. Ken says:

    The lowering (or elimination) of the promised retiree COLA has put a chill on the plans of thousands of public employees who currently, or will soon, qualify for a retirement benefit, as many will work at least several years longer than originally planned to make up for the shortfall by beefing up savings and 401(k)s. This is a positive development from a PERA perspective, as the projected unfunded liability will decrease at a faster pace.

    The US Constitution considers the 50 states as sovereign entities in fiscal matters, and as such forbids bankruptcy as a means to modify contracts. Under TABOR, the Colorado State Legislature no longer has sovereignty over tax policy, which has been relegated to the voters. In this regard, Colorado has a unique governance structure among the states due to its change from representative to popular democracy. This change may be in violation with the US Constitution, and is currently being challenged by the law firm of Boulder attorney, Herb Fenster.

    Therefore, PERA members and retirees need to wake up and realize that the 92% of voters with no PERA ties have little interest in honoring obligations to vested public employees, especially current retirees who are no longer performing services. If the Save PERA COLA lawsuit is not aggressively fought, or does not prevail in court, retiree benefits will be further whittled down in the years ahead.

  15. Dennis Burr says:

    Thank you for fighting the fight for all of us!! Historically, the cost of goods and services increase annually. The COlA was established specifically to assist retirees on a fixed income. We no longer have earing power, but we continue to have increased annual cost of living obligations. I am willing to do my part by sacrificing the COLA for 2010 but thereafter we must retain the annual COLA at 3.5% as established in our retirement benefits package as promised when hired. Surely there must be some sanity out there in political-ville. Please correct this injustice to the fixed income people who have served this great State! We have already made sacrifices to the State of Colorado in the form of lossed income due to wage freezes and salary reductions over the past 25 years.

  16. As I sit here with 23 years of purchased and earned service credit and within two years of retiring I have to tell you that I feel very betrayed by both the State Legislature and Pera. I thought we vested at five years….now they say we’re not fully vested until we complete our career and start to draw a retirement. How can you change the agreement on folks that have so many years and many thousands of dollars invested? I would love to contribute to the fight but I don’t see how I would benefit after reading all of the information provided on this site. I would remind all of you that about ten short years ago pera was funded at 105% and our wonderful legislature cut back on the amount paid by the employer into the pera pension. The State has benefitted at the expense of the pera fund for over ten years and now the legislature expects the employees and retirees to bear the burden of fixing the problem. I applaud this groups efforts in taking on the fight for some of the retirees, but at the same time wonder who’s fighting for the rest of the pera members. Colorado Wins is ineffective at best….I haven’t seen their name in the news or anywhere else in regards to this issue. Seems they are more interested in fighting with the DOC about important issues like facial hair!!
    Am I angery? Darn right I am! Good luck with the law suit maybe after you win this battle you will be willing to sue them for all of the pera members.

    • SavePERACOLA says:

      Douglas, we empathize with you on your predicament. Unless you are eligible to retire prior to March 1, 2010 it is a different set of legal arguments about the effects of SB1 on active PERA members. You might investigate whether or not you are eligible to retire with a reduced benefit under PERA rules currently in effect.

  17. Darlene says:

    I hope everyone is spreading the word to donate to Save PERA COLA. I also hope every one looks into the facts of this issue. PERA spent money on lobbyist-to lobby for SB 1. Also, in the past PERA paid out money in the form of bonuses and will probably do so in the future (Sorta reminds you of Wall Street). Nice of PERA to tell us our retiree’s money is being spent on lobbyist and bonuses. So I ask you-Do you really trust PERA?

  18. Bruce G Nelson says:

    Greetings, Having retirement cola reduced is difficult at best. I like more than likely a fair number of retirees don’t mind helping out. Perhaps we could be given our 2% this year and see how the future goes. I don’t mind the 2% cola cap, what bothers me is 0% this year. Give a little and we will all get more……Respectfully, Bruce G Nelson

    • saveperacola says:

      Your thought may very well reflect the generosity of many retirees who have the financial ability to do so. A number of other retirees are unable to, due to their lower benefits. Nonetheless, any such “partial COLA solution” would still violate the U.S. and Colorado Constitutions, which we allege in the complaint.

  19. SLK (Sally) says:

    If you wrote back to Meredith Williams, Executive Director PERA, after you got the letter explaining (justifying) the changes in our PERA contract, then you probably got this FAQ link: http://www.copera.org/pera/about/ask.stm There are answers, notice I didn’t say good answers, to frequently asked questions. In response to questions about the cap of 2% this was part of the “canned explanation”: “Some of you have asked if the COLA cap can be increased to an amount other than 2 percent. The Board was very sensitive to this issue and tried a number of variables before coming to the conclusion that the 2 percent cap is the only COLA that the PERA trust funds can afford. (Most other pension plans, public and private, do not have automatic COLAs and remember that Social Security is not a retirement plan.)” Imagine what we would be facing it the board hadn’t been “very sensitive” to this issue. I’m trying, Meredith, to wrap my mind around the fact that Social Security isn’t a retirement plan – not a lot of comfort there (sorry for the sarcasm). In general, these answers don’t quite do it for me. . . how about you folks?!

    • Barry Thorpe says:

      Most other pension plans, for example in the private sector, go out to employees who had opportunities to earn substantially more than school districts EVER paid.
      We were involuntary contributors to this system, with NO say in the investment program, and no chance to OPT-OUT. We never enjoyed a big bonus during the good economic times. In my district the schedule was frozen for 12 of my 27 years. We lived paycheck to paycheck with hum of a distant mantra in our ears…..deferred compensation. I remember colleagues who would say…..”I guess we can’t complain about the salary freeze….at least we have a great pension plan…..” No, we didn’t have a great pension plan if the rules are to be changed AFTER vestment. Take the contract breach and the pitiful PERAcare health insurance and our “Pension” system is not a reward, but a punishment for educating the children of Colorado.

  20. David McBride says:

    This is all a game of Bait and Switch. PERA and the Colorado legislature enticed (baited) senior employees to retire early with juicy provisions so state employers could then hire rookies at a discount. Now that we are retired, they are changing (switching) the contracted 3.5% benefit increase. They are pre-announcing their intention to play the same “Bait and Switch” game with this 2% COLA cap too, it’s right there in the Bill:

    “24-51-211.5. Notice of possible change in benefits – actuarialnecessity. THE ASSOCIATION SHALL PROVIDE WRITTEN NOTICE TO EACH MEMBER,DPS MEMBER, AND INACTIVE MEMBER OF THE ASSOCIATION THAT THE POSSIBILITY OF AN ACTUARIAL NECESSITY COULD OCCUR IN THE FUTURE, AND THE GENERAL ASSEMBLY MAY MODIFY BY BILL THE BENEFITS ALLOWED TO MEMBERS OF THE DEFINED BENEFIT PLAN.”

    Should this lawsuit fail, there will be no end to this bleeding of our pension benefits. PERA’s fund has $35,000,000,000.00 in current value, and that is going to be in the sights of legislatures and state employers into perpetuity. It troubles me that this current ‘actuarial necessity’ has not been confirmed by an independent third party. PERA and the Colorado legislature cannot be trusted to keep its promises to us. It would be naive to believe all they say about the causes of this ’emergency’ (see the Pew Report). It would be naive to trust that this promise of a 2% COLA will be fulfilled without a future ’emergency’ that will crush it too. After all, the precedent for raiding that later is being set now with SB 1.
    Burn me once, shame on you. Burn me twice, shame on me. My check is in the mail today.

  21. RLK says:

    The PERA COLA cuts are yet another example of middle class abused by a system that expects and requires us to bail everybody else out,the wealthy as well as the poor-the U.S. Weathfare system and the Welfare system both exist on our backs. Anyway, I’ll gladly make a donation to saveperacola as should ALL Pera retirees.
    Perhaps a giant fundraiser in a central location in the state-Colo. Spgs.? would be a good idea. And, how about smaller local fundraisers? Anybody interested?
    Also, like it’s always been, in the case of collective bargaining, ALL covered employees reap the benefits of those who pay the dues (e,g., CEA-NEA).The leaches are usually Republicans, by the way, and I’ve never known one of them to turn down a benefit or raise fought for and paid for by others!
    So,let’s don’t let that happen with this fight. Everyone who stands to benefit from this fight needs to make a donation, to put money where their mouths are.

    • saveperacola says:

      We disagree that Republicans (or Democrats or anyone of a certain political persuasion) are “the leaches”, as you suggest. Supporters of the lawsuit are simply retirees who disagree with what is being done to their contracted rights.

      • SLK (Sally) says:

        I do agree with RLK that there are leeches among us who do not take a stand but benefit when others put their money on the line. I saw it with CEA. Many of us paid our dues but all of us reaped the benefits when the association fought for fair conditions in the workplace and won. We’re in this together whether we want to be or not. SB1 is a breach of contract, plain and simple. A cap of 2% in perpetuity is unreasonable and unjustified.

  22. Artimese Cowan says:

    Talk about cutting off your nose to spite your face. I received a statement of the money that I have received from PERA since my retirement. I was surprised to learn that it was more than $500,000.00. I intend to live another twenty years and if saving my pension now will enable me to have that pension twenty years from now, I am all for SB1. If this lawsuit prevails and I lose my pension, I’ll only have you to blame.

    • saveperacola says:

      If this lawsuit prevails, you may blame the General Assembly who passed an unconstitutional law and the Governor who signed it. At that point they will go back to the drawing board and create Plan B. There are many alternatives available which have been previously presented to the General Assembly. All who voted for SB1 expected a legal challenge and knew that the state would have to defend it. It’s the American way.

    • Barry Thorpe says:

      Why don’t you take a look at what you paid in and imagine it having been invested over those same years. Now calculate the amount the school district paid in (which could have been part of your salary) and compound that interest over a career of wise investment. I apologize to no-one that my lifetime income will exceed the input from my salary. It’s called capitalism.
      I lived on just over 1/2 of the income a similarly educated individual made in comparable work in the private sector. I endured ridiculous swings of pressure ranging from “a nation at risk” to “CSAP” through “no child left behind”, rolled with the punches of a thousand helicopter parents, and kept right on delivering quality education through 7 superintendents and 9 different principals, each one a more glaring example of the Peter principle. I have it coming to me, both by righteously deserving it, and more importantly because it is a legal, binding, contract. It is my property in every sense of the word.
      Of course you will have that pension 20 years from now, and 30 years if you live that long……..it’s the deal THEY engineered, and contracted for. I hope the attitude that we should surrender a little to “save” our pensions doesn’t spread. A contract IS a contract. You must stand back and see, it’s not” cutting off your nose to spite your face”……It’s stopping a small theft to preclude an implicit permission to steal the rest .Don’t be fooled into thinking this will be the last assault on your pension if they win.
      The test of whether they intend to cheat you has already been answered, its SB-1 !!!!

  23. SLK says:

    We’ll be sending a contribution. We can’t send a lot this month but we are going to cut back on some memberships, etc., to allow us to start contributing to this cause. When we can send more we will. This is a dangerous precedent and it needs to be fought. CEA should be on board after all of the dues teachers have paid over the years! I know that they were in the negotiating mood earlier but where are they now.

    Just keep in mind everyone, Social Security doesn’t cap COLA at 2%. The last COLA Social Security recipients received was 5.8%. Over a 10 year period, Social Security recipients only got less than 2% once before this moratorium. Even with the 2 low years the average COLA over a 10 year period was 2.78%. If the 0% year is taken out of the equation and one looks at the 10 years prior to that, the average was 3.03%. Check my math go to http://www. ssa.gov/OACT/COLA/colaseries.html With this in mind it makes one wonder why the Colorado Legislature and PERA thought 2% in perpetuity was reasonable. No more “political math”, we need sound, reasonable, and fair accounting!

    Let’s get on board and fight this. Even if you can only send $5, send it!

    • John Kiljan says:

      I did go to the Soc Sec website that SLK recommended. It was pretty frightening. In the late ’70’s as the US worked off it’s Vietnam War debt and oil supplies were cut off in the Middle East, the dollar lost over half of its purchasing power.

      Only Soc Sec recipients were protected with their unlimited COLA’s. Here are the COLA increases that the feds paid out to recipients during that period:

      1975 8.0%
      1976 6.4%
      1977 5.9%
      1978 6.5%
      1979 9.9%
      1980 14.3%
      1981 11.2%
      1982 7.4%

      Will this awful period ever be repeated? Probably not. But remember, we are only one air strike away from all Persian Gulf shipping being stopped for years. And, the news on the current federal budget deficit speaks for itself.

      A 2% max COLA seems like awful thin body armor for what retirees could be hit with in the future.

      –John

  24. Dennis Myers says:

    Is there any provision in the suit that asks for an injunction being issued by the court, preventing PERA from implementing these changes while the court case is being reviewed? I assume we may well be looking at a period of several years for this case to be resolved.

    • saveperacola says:

      Yes. On page 9 of the Complaint you will find at the bottom of the page, part C., “issue a permanent injunction…barring implementation of Sections 19 and 20 of Senate Bill 10-001.” You may read the complaint by going to Latest News article “Lawsuit Filed on 3.5% Cut in SB1” and then clicking on the complaint link at the botoom of that article.

  25. Robert Mitchell says:

    Do you have a suggested flat contribution amount or suggested contribution percentage of PERA monthly benefit to fund the lawsuit?

    • saveperacola says:

      There is no suggested amount of contribution, nor a flat amount. It is difficult to do so because of the varying incomes and the unique financial situations of the 80,000 retirees. We cannot post individual amounts contributed by anyone on line, nor total amounts collected, as that information would be useful to the defendants in the lawsuit. I will be initially contributing one-fourth of my gross monthly benefit, which is somewhat less than I will forgo in the annual benefit increase in the first year under Senate Bill 1. All amounts are welcome and we realize the sacrifice to do so by each donor. A full accounting will be made public after final adjudication of the lawsuit.

  26. Jim Schoendaller says:

    Initially I was furious our COLA was being reduced. However, after some time to reflect, I believe that fighting SB1 may be short sighted. If this legislation will ensure PERA’s solvency beyond 20 years, I’d rather get a reduced COLA forever rather than a full COLA until PERA defaults.

    Even with a reduced COLA, PERA is the best deal around. There are very few other places where you can retire as early as 50 and get back many times what you contributed. I urge retirees to do dome simple math. Take your current monthly benefit multiplied by how long you (or your beneficiary) expect to live. For simplicity, don’t factor in any COLAs. Then subtract what you contributed. The result may surprise you.

    Based on calculating my expected benefit, I can no longer support fighting what PERA believes is necessary to ensure its long-term survival. Thank you.

    • Robert Mitchell says:

      Initially, I, too, felt like supporting a lawsuit would be a foolish thing to do. Like you, I expect (hope) to collect a PERA benefit for the next 30 years and am worried about solvency of the fund. However, if this reduction is permitted to happen, what would prevent the legislature from coming back to the well again and again in an attempt to balance the state budget? Perhaps they will attempt to reduce employer contributions creating another PERA “fiscal emergency” where our benefits, once cut, will be easier to cut again.

    • Robert Dorsey says:

      The reason that I support the lawsuit is because I don’t trust the legislature. It is possible that sometime in the near future, they will be back for another reduction in benefits, possibly eliminating or reducing the COLA further. As I understand it SB1 was amended on third reading in the house to require PERA to send to all members a notice that benefits could be changed in the future if there is another “fiscal emergency”. I can see a future legislature looking at the employer contribution rate and being very tempted to reduce what they put in to help balance budgets. Once the contributions are reduced, then it will be easy to declare another emergency and change benefits.

      Allowing the cuts in the COLA to go forward without a ruling from the courts, will set the precedent that the contract we have with PERA can be changed anytime by the legislature, possibly including the health care subsidy and the basic benefit itself.

    • Barry Thorpe says:

      I see your point, and understand how you might come to the conclusion to only allow a slight breach of contract. But in the setting of legal precedent to strip parts of contractual agreements, the door is open to wholesale breach of the rest of your PERA contract.

      There are few , if any pension programs that can guarantee “solvency” forever into the future. However, PERA isn’t a welfare program , it’s a debt owed for services rendered under contract to the citizens of Colorado. The people who incurred the debt and benefitted from the services provided are liable to pay the contracted amount. If that isn’t true, then no capitalist system can ever rely on the rule of contract law and survive.
      The highway builders may run out of concrete, and need to get more………we give it to them through taxes because we contracted with them to build a road. The “road” built by we long-term educators is already built. I taught over 6000 Colorado kids for 30 years to live up to my end of the bargain. PERA, if necessary will have to get tax revenues from the state to pay the states debt. We cannot “take back” 30 years of service, so they cannot change the rules of the contract once we have performed it.

      Don’t fall for the fear tactic of suggesting PERA will go broke. PERA will not go broke, because this state has a source of income for paying it’s debts…..Taxes.

  27. Terrie Reitz says:

    I am livid about PERA and the cost of living cuts! Look for a donation in the mail from me!!
    When 100,000 retirees each sent in a bit that gives our lawyers more fighting power!!

  28. Sue Hoy says:

    yOU ARE AN IDIOT. WISE UP!! consider the consquences if you win. don’t ruin my pension.

    • saveperacola says:

      Sue, we respect your right to disagree and understand your issue. You and your husband Gary Hoy, President of the Colorado School and Public Employees Retirement Association (a PERA support organization and donor of $5000 to http://www.SecurePERA.org) are quite invested in this issue, as are we. Your name calling does not enhance your argument and it reached the limit of decency in comments that we will approve in the future.

  29. Eugene Bray says:

    Will you be asking for reimbursement of the cost of litigating this suit as damages so you are reimbursed for the cost of the suit? If so, will our donations be returned. The reason I am asking is I was forced into early retirement due to budget issues with the City of Colorado Springs, and coupled with the current economy, and the Fannie Mae and Freddy Mac fiasco I ended up sealing in losses in the market to purchase additional years of service. I may have made a different decision I had known this change would occur.

    • saveperacola says:

      Yes, you will be reimbursed on a pro rata basis with any excess funds that may be awarded by the court. That occurs when the plaintiffs win the case. The judge makes this ruling consistent with the law.

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