PERA and State File Opening Answer Briefs

Both PERA and the Attorney General filed their opening answer briefs Thursday with the Colorado Supreme Court. Additionally, PERA filed an appendix that includes the Attorney General Ken Salazar’s 2004 opinion on this subject. The appendix also includes a full transcript of the Senate and House Finance Committees’ hearings that were held in the opening days of the 2010 legislaive session. They provide fascinating reading for those with time to do so. The reader should note that there are many inaccuracies in the wording of the transcripts and therefore when words or ideas don’t make sense to you that is likely the reason.  You may view these and all filed documents by clicking and then the document you wish to view. They are listed by date with the newest first. We welcome your sensible comments, regardless of your position.

From here, plaintiffs will file a reply brief and the defendants will also file a reply brief. Each should take less than two months. From there, the Colorado Supreme Court will direct further activity in the case.

Fundraising has gone well and we expect to meet our commitment to the attorneys within the next few months. You are again asked to donate to this cause so you can proudly say you were part of this historic lawsuit to ensure your rights as a Colorado public pensioner. Click on to contribute! Use Paypal or send a check (preferred).

7 Responses to PERA and State File Opening Answer Briefs

  1. Stan Brown says:

    At some point in time, some PERA retirees may be better off claiming a Colorado Old Age Pension (OAP), as it’s annual COLA is tied to Social Security whereas the PERA COLA is capped at 2.0%. For example, in 2012 the OAP COLA was 3.6%. Here’s an excerpt from a doc entitled Old Age Pension Cost of Living Adjustment (OAP COLA) Adjustment for 2014 and In-Kind Support Maintenance Adjustment (Rule-making#: 13-11-13-1)

    “On October 30, 2013, the Social Security Administration (SSA) announced a 1.5% Cost of Living Adjustment (COLA) for all Social Security and Supplemental Security Income recipients effective December 31, 2013. This increased the Supplemental Security Income (SSI) maximum payment by $11 ($710 x 1.5% = $11) to $721 per month. This rule will revise the Colorado Department of Human Services rules to increase the Old Age Pension (OAP) grant standard to $748 in order to pass along the COLA increase. The components of the grant standard will be adjusted accordingly.”

    Each year the OAP COLA is granted based on the “emergency rule-making procedure” in order to be effective January 1, which waives the Administrative Procedure Act noticing requirements, as follows:
    “20 CFR 416 et seq. requires a Maintenance of Effort (MOE) between the State of Colorado and the Social Security Administration (SSA). This MOE requires that Colorado spend at least the same amount in the current year as they did in the previous year for specific categories of assistance, which includes OAP and AND/AB/SSI-CS recipients who receive SSI. Failure to pass along the COLA could impact the MOE agreement with the SSA. Failure to comply with terms of the MOE could jeopardize Medicaid Federal Financial Participation (FFP) funds as the SSA could impose a sanction of no less than one full quarter FFP match (approximately $300-350 million) for every month Colorado does not meet the MOE requirement. This COLA increase will be completed in the Colorado Benefits Management System (CBMS). OAP recipients live at 77% of the Federal poverty level. Emergency adoption of these rules is necessary in order to implement the COLA by January 1, 2014. Adoption of these rules will allow these individuals to improve income levels by granting an increase for their daily living expenses, positively impacting the health, safety, and welfare of recipients.”

    My point:
    Since the Social Security (SS) COLA over the past 30 years has been close to 4% per year, while PERA retirees can only expect at most only 2% going forward, OAP may end up being a more attractive alternative for some retirees down the road, especially those who do not receive a Social Security benefit. The SB10-1 COLA changes have considerably lessened the value of the PERA retirement benefit in actual monetary terms and also relative to an earned Social Security (SS) benefit, and even relative to unearned benefits such as OAP and Supplemental Security Income (SSI).

    For example, OAP and SSI can be combined. Therefore, a non-PERA retiree as young as 60 can receive a maximum benefit of $1,469: $748 (OAP) plus $721 (SSI). So, what does a PERA retiree do when their benefit drops below the OAP/SSI threshold sometime in the years ahead, especially after an inflationary period?

  2. Steven W. Goering says:

    Save PERA COLA,

    Since the Appellate Court has determined that employee contractual rights exist in PERA pensions, the question must be answered: At what points are these contract rights created? There seems to be no doubt that rights to base pension benefits currently vest after five years of service. This contract point is established at hire and the contract terms are irrevocable during continuous employment, becoming effective when five years of continuous employment are completed. It is also without doubt that the Legislature could change vesting requirements to something other than five years or to add requirements in order to vest, but could do so only prospectively since current employees’ contract points were at their hire date and a change in these contract terms would improperly abrogate the contract.

    Similarly, COLA benefits are subject to prospective change as the Legislature changes pension rules for new hires. Again, there is a contract point for these benefits, but rather than being at the point of hire, or when base benefits vest, I would contend that the contract point for COLA benefits is at the point of actual retirement. Thus, it is permissible for the Legislature to increase the COLA for all employees, but it would be impermissible to reduce the benefit for any employee, at any time, below the amount in effect at the point of that employee’s retirement date. These are the terms agreed to by the State and the employee at the time of retirement as base benefits are agreed to at the point of hire.

    The essence of this argument is that the State has specific contractual relationships with each individual employee, rather than general contractual relationships with all employees.


    Steven W. Goering
    Retired DOLA Employee

  3. Stan Brown says:

    I noted some striking contrasts in my reading of the plaintiff and defendant briefs. The plaintiff brief was straightforward, using objective reasoning, while the defendant briefs were, at best, deceptive and disingenuous.

    • saveperacola says:

      You are an astute reader. Remember, even PERA leadership was convinced of our position and said so often through the years. Then they asked a former supreme court justice to devise a legal opinion that would provide a rationale for them to cut our vested annual benefit increases. The best she could do was cite a private life insurance dispute that clearly was off-point. When will PERA release this legal opinion to the public for all to see her reasoning?

    • Tim Hansford says:

      I agree completely. I was impressed by how the plaintiff’s brief stated the position in language that was “to the point” and not submerged in legalese. The state defendant’s brief seemed especially to have a whiff of desperation to it.

      My thanks again to our legal team for fighting the good fight. I will be making another contribution to the fund so that you can continue to carry on your important work for the benefit of all of us.

  4. saveperacola says:

    Yes. Our colleagues in New Mexico lost their request (Docket No. 34,210) for a writ of mandamus that would have compelled the “Educational Retirement Board (ERB) to pay them an annual cost-of-living adjustment to their retirement benefits, calculated according to the statutes in effect at the time of the Petitioners’ date of maturity of their rights, instead of the current stautes as recently modified by our Legislature.” While similar in nature to Colorado’s situation, the New Mexico history of COLA changes is markedly different from Colorado’s history. In New Mexico the COLA was based on regular changes in the consumer price index (CPI) whereas in Colorado the annual benefit increase (ABI) was fixed at 3.5% (3.25% Denver). The NM Supreme Court relied heavily upon its own decision Pierce v. State, 1996-MNSC-001, 121 N.M. 212, 910,O.2d 288 and the recently changed NM Constitution concerning the public employees’ vested rights in a retirement plan. Colorado’s courts can rely on neither of these legalities as they are unique to the State of New Mexico. We have our own supreme court decisions that are being argued by the parties.

  5. Mo Q says:

    The New Mexico Supreme Court just ruled on retiree right to COLA on Thursday. It might be worth a look.

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