30, 2011 Update
Judge Robert S. Hyatt has ruled against all claims of a group of four PERA retirees who challenged Senate Bill 10-001 in a lawsuit. Plaintiffs sought restoration
of their annual benefit increases (COLA) to the previous law that set them at
3.5% per year (3.25% for DPS Division). SB10-001 reduced the increases to a maximum of 2% per year. Judge Hyatt granted PERA and the State of Colorado’s Motion
for Summary Judgment, thus dismissing the case.
Plaintiffs and their attorneys are evaluating the decision. The decision on whether to appeal will be made shortly. Any one (or more) of the named plaintiffs can choose to appeal.
Judge Hyatt wrote as follows:
“The motion for summary judgment is granted as to all of Plaintiffs’ claims. 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. Plaintiffs’ takings and due process claims likewise are premised on the existence of a constitutional right to an
unchangeable COLA formula and necessarily fail because no such right exists. The 42 U.S.C. § 1983 claims fail because the underlying constitutional claims fail. All material facts are undisputed and found in the public record. The COLA provisions themselves establish that Plaintiffs have no contract right to a COLA frozen at retirement and the latest COLA changes do not impair the parties’ reasonable expectations.
“This Court finds, based upon statutory provisions of the last 40 years, as well as
legislative history and DPS plan language, that the General Assembly’s most recent change to retiree COLA does not alter the fundamental mechanism for payment of pension benefits for PERA retirees. That has always
been and remains to this day, a base benefit set at retirement. There has also been a separately calculated cost of living adjustment based on a formula that has always been fluid and repeatedly changed. For 40 years the COLA formula has been subject to significant change without ever unconstitutionally altering the base pension payment to retirees.”
The full Order may be read at www.SavePERACOLA.com/Resources . A copy of the
Minnesota dismissal decision is also listed there.
We’ll get back to you shortly.