Plaintiffs will not appeal Colorado Supreme Court Decision

Gary R. Justus, et al. v. The State of Colorado, et al.

The four plaintiffs in the case to overturn Senate Bill 10-001 concerning reductions in promised annual benefit increases (ABI, aka COLA) have decided to not appeal the case to the U.S. Supreme Court. Such an appeal is termed a writ of certiorari.

Plaintiffs’ attorney William T. Payne released to Save PERA COLA the following rationale for not appealing the issue:

“…the court’s opinion was based on Colorado state law. An article from a law firm which has a robust Supreme Court practice notes:

A sure-fire way to guarantee rapid denial of certiorari is to file a petition disputing findings of fact rather than determinations of law; presenting questions of state rather than federal law; or asking for review of a decision that rested on adequate and independent state law grounds even if the court below also addressed a federal issue. http://www.appellate.net/includes/print.asp?dir=articles&file=petit799.asp&contentarea=yes

We also noted if plaintiffs ultimately lose this case, plaintiffs may be liable for “costs” such as court reporter fees for transcripts. While “costs” are small in this case, they would still run into the thousands of dollars (according to Defendants), because there were a couple of conferences or hearings before courts.

We have obtained a tentative agreement from the Defendants that they will not seek “costs,” as long as we do not file a petition for review in the U.S. Supreme Court. While Defendants are quite confident that the U.S. Supreme Court would not grant us any relief were we to file a petition for review, they would prefer if all parties could avoid the additional time and expense necessary to brief any such petition. We strongly recommend confirming this agreement with the Defendants, and would like you to accept our recommendation.

Please call if you have any questions.

Sincerely,

William T. Payne”

That tentative agreement has now been finalized and we thus can release this outcome to you. We are most disappointed in the Colorado Supreme Court’s ruling and what it means for PERA retirees. The mid- to long-term damage to retirees’ financial stability is significant. Moreover, the legal precedent that passage of Senate Bill 1 has set will enable the legislature to again cut our annual benefit increases below 2%. When inflation returns to historical levels, retirees and their pensions will not be protected from it. PERA’s well documented promises of a “guaranteed 3.5% annual increase” were simply lies that finally came to light when PERA reconciled their many past mistakes into the Senate Bill 1 “fix.” PERA attorneys then successfully argued in court against PERA’s previous pronouncements that the 3.5% increases were part of the pension contract with those who had already completed their part of the deal. They also argued that previous legislative changes in annual increases (all positive) created precedent for doing so again, but this time they were negative changes. We do not believe that the PERA Board has upheld its fiduciary duty to protect the interests of its active or retired members. Nor do we believe that the unions that lobbied in favor of SB1 fairly supported their members who willingly paid annual dues over their careers.

Nonetheless, the Supreme Court has spoken and we must respect their right to do so. It’s time to move forward. We are now investigating how we can better hold PERA accountable in the future to demand full funding of the existing benefits structure from the legislature, protect what we have left, and educate current and future employees about the risks of choosing to work in Colorado PERA covered employment. We’ll let you know more in the future.

We thank our attorneys Bill Payne and Richard Rosenblatt for their incredible efforts to win this case. We could not have wished for better representation.

Gary R. Justus, plaintiff and Rich Allen, President of Save PERA COLA

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36 Responses to Plaintiffs will not appeal Colorado Supreme Court Decision

  1. Randy Storm says:

    (cross post) Thoughts on the candidates for PERA Retiree Trustee?

  2. Stan Brown says:

    A POUND OF FLESH FOR AN OUNCE OF CURE?

    PERA’s last minute legislative gambit, HB15-1388, was PI’ed today in the Senate Finance Committee. As I reflect on the result, what comes to mind is a Shakespearean quote from The Merchant of Venice, “a pound of flesh”. My addition to the quote symbolizes the choices PERA will probably face in the years ahead, perhaps as early as the 2016 legislative session.

    I do believe PERA and TABOR are on a collision course, and HB15-1388 was designed to protect PERA from contribution holidays sure to come, and to frustrate further efforts from anti-public pension groups who would like to further claw back benefits. The economic trend is to progressively socialize, so there will be more demand on the public purse to improve the general welfare, such as more spending on Medicaid and a host of other programs yet to materialize. As a counter to this trend, there will be a major push back from taxpayers, especially the affluent, leaving public retirees in the middle of the action trying to protect their vested benefits.

    One outcome of putting off the vote on PERA bonding is to allow time for a quid pro quo negotiation to occur. The Republicans, under the watchful eye of certain national and state conservative think tanks, may be willing to go along with bond debt (ounce of cure) in exchange for some claw backs (pound of flesh). Since retirees already gave up a huge portion of their benefit in SB10-001, it’s only fair that active members give up a prospective portion of their benefits earned from services not yet rendered, or future service. Of course, Colorado WINS and other employee groups will insist on shared sacrifice with retirees.

    An interesting side note: ‘quid’ is an old English term for ‘pound’ of currency.

    Are PERA and TABOR on a collision course?
    http://www.ccu.edu/centennial/2015/04/are-pera-and-tabor-on-a-collision-course/

  3. Stan Brown says:

    PROFILES IN COURAGE – COLORADO STYLE

    In 2012, Representative Holbert of Parker was recruited by the Independence Institute to sponsor a PERA reform bill which would have gutted retiree medical coverage under PERAcare. Days later he asked that his own bill be tabled after his office got swamped with phone calls and emails from angry PERA retirees.

    Now, just a few days after the introduction of HB15-1388, not only does now Senator Holbert want his sponsorship removed, but says he will vote against his own bill. I suspect this time the heat and pressure came from the conservative think tanks.

    2012 Legislative Session:
    Legislator (Rep. Chris Holbert) spikes his own bill
    http://www.coloradostatesman.com/content/993329-legislator-spikes-his-own-bill

    2015 Legislative Session:
    Sen. Chris Holbert withdraws sponsorship of pension-bond bill
    http://blogs.denverpost.com/thespot/2015/05/01/sen-chris-holbert-withdraws-sponsorship-of-pension-bond-bill/119652/

    UPDATED: Colorado Legislature considers debt a public pension rescue
    http://watchdog.org/215093/public-pensions-bill-colorado/

  4. Stan Brown says:

    Too bad HB15-1388 didn’t come out earlier in the session. Of course, it is meant to secure the funding mechanism agreed to in SB10-001 … which everyone realizes will eventually go out the window when either the economy or legislative political will weakens. I expect we’ll hear quite a bit from PERA detractors from the Independence Institute, the Centennial Institute, and Watchdog.org in the months ahead as I expect HB15-1388 will be put off until the 2016 legislative session.

    There may need to be a give and take quid pro quo with PERA’s detractors in order to pass something similar to HB15-1388 in the next legislative session, such as:

    1. increasing the HAS calculation from 3 to 5 years;
    2. increasing retirement age;
    3. reduce PERAcare subsidy;
    4. increase active PERA member contributions;
    5. etc.

    In other words, claw backs from both active and retired PERA members in exchange for a disciplined, dependable funding mechanism such as bonding (POB) will be on the negotiating table which will double as a chopping block.

    Are PERA and TABOR on a collision course?
    http://www.ccu.edu/centennial/2015/04/are-pera-and-tabor-on-a-collision-course/

    Colorado’s public retirement system adds risk, chases return
    http://watchdog.org/209179/colorado-pera-risk/

    Put the brakes on PERA bonds bill
    http://www.denverpost.com/editorials/ci_28015185/put-brakes-pera-bonds-bill

  5. Stan Brown says:

    State Treasurer Walker Stapleton wants to take a portion of PERA employer contributions to pay for some ultra-risky pension obligation bonds (POBs). As we all know from the 2010 PERA “reforms”, pensioners ultimately bear the bulk of pension fund investment risk. In SB10-001, our annual increases depend on both market performance and the investment prowess of PERA. If PERA makes poor investment decisions, then retirees “share” the risk even if the overall market is doing well.

    Denver Public Schools took out some risky pension bonds in 2008 and got hammered the following year after the financial meltdown. If PERA follows Stapleton’s advice, will it be deja vous all over again after the next financial crisis?

    PERA shortfall ‘fixed’ in 2010 but minders see quick solution in bonds
    http://www.denverpost.com/news/ci_27985151/pera-shortfall-fixed-2010-but-minders-see-quick

    Excerpt:
    “Opponents say the danger to the state’s credit rating is simply too high — much less the risk to more than 532,000 retiree pensions — to even consider POBs. Markets fluctuate too much to guarantee returns, and a glitch in the economy similar to what happened in 2008 isn’t only likely, it’s inevitable, putting the state and PERA in peril.”

    Michael Bennet, then DPS Superintendent now US Senator, thought it prudent to invest in pension bonds, which ended up costing the taxpayers tens of millions of dollars.

    These Wall Street geniuses always seem to get it wrong when trying to time the markets. Treasurer Stapleton holds business degrees from both Harvard and London business schools. Senator Bennet was Managing Director at the Anschutz Investment Company prior to his entry into politics.

    Denver schools to pay millions to reverse controversial 2008 bond deal
    http://www.denverpost.com/ci_23016666/denver-schools-pay-millions-reverse-controversial-2008-bond

    Excerpt”
    “Denver Public Schools, which entered a risky and controversial variable-rate pension bond deal a few years ago, next week plans to finish converting those bonds to safer fixed-rate instruments — a reversal that will cost more than $120 million and put a dent in the district’s budget for years to come.”

    • Richard Allen says:

      POBs (or PCOPs in the CO context which the Post does not seem to understand) have their place if they are used right. If you use them to pay down the unfunded liabilities they are fine as long as the interest is less than the earnings assumption or a realistic earnings assumption if you want to be sticky. This is not hard in a ZIRP world. It is only when you use them to avoid making contributions that they become a problem or when the interest rate is too high or financial machinations are too extreme ala DPS.

      The interesting thing is that PERA is now supporting them. They used to just hate them. I had to spend many hours with Greg Smith convincing him that they were not the tool of the devil. Never did succeed back then but finally put language in a draft agreement to convince him that they were DPS obligations not PERA obligations. Of course, DPS after I left got the PCOPs offset. This is theoretically an obligation for PERA but since there is a wall between DPS and the rest, I think that PERA would be OK.

  6. Stan Brown says:

    Report: Colorado 6th in ‘taxpayer ROI’

    “Colorado’s economy, health services and air quality help to make it the sixth best state for taxpayers to get returns on their investments, according to a new WalletHub report released Tuesday.”

    “Colorado, which has the 13th lowest tax rate, fared the eighth best in the nation in the government services of infrastructure, education, health, safety economy and pollution.”

    http://www.denverpost.com/business/ci_27910376/report-colorado-6th-taxpayer-roi

    However, Colorado is ranked 41st in pension funding, or 9th worst:

    20 Best & Worst States for Pension Funding – After the Great Recession, some state public employees find their retirement plans imperiled while others are doing fine

    10 Worst States:

    9. COLORADO: 60%

    Unfunded Liability: $22.9 billion
    Debt & Pensions: $4,996
    State Debt: $518
    Unfunded Pensions: $4,478
    % of Personal Income: 11.3

    http://www.thinkadvisor.com/2013/09/09/20-best-worst-states-for-pension-funding?page=3

  7. Stan Brown says:

    Kind of sobering to realize that there is no constitutional or contractual right to adequate pension funding. The 2011 NJ pension fix is unraveling. Perhaps it was too ambitious, as they tried to accomplish full funding over a 7 year period of increased contributions from all parties, but primarily employers. Colorado’s approach in SB10-001 was to spread out the fix over 30 years, primarily hitting up active and retired employees, with about 10% of the overall fix coming from increased employer contributions.

    NJ Governor Christie appeal: Pension ruling used ‘fabricated’ right

    http://www.utsandiego.com/news/2015/mar/31/christie-administration-says-judges-pension/

    Excerpts:
    “A ruling that demanded the New Jersey state government contribute another $1.6 billion to public employees’ retirement funds came from a judge who “fabricated a constitutional right to pension funding,” Gov. Chris Christie’s administration told an appeals court on Tuesday.”

    “In 2011, Christie and lawmakers agreed to a fix. Workers would not be able to retire as early and would increase their contributions, and retirees would lose automatic cost-of-living increases and medical coverage. In exchange, the state would ramp up payments over seven years to catch up on the missed funding.”

  8. Stan Brown says:

    Interesting article … in particular the following statement: “with funding challenges caused by prior contribution shortfalls somewhat offset by the state’s established flexibility to enact substantial reform”. It appears, at least to me, that the statement “state’s established flexibility” is a euphemism for a cooperative state supreme court that ignores established legal precedent and contract law to enforce unconstitutional legislative overreach in the breaching of vested contracts with public pension retirees in order to serve a “perceived” higher public or social purpose.

    Article Excerpt:
    “Overall, Moody’s assesses fiscal pressures from Colorado’s state and local pension funds as moderate, with funding challenges caused by prior contribution shortfalls somewhat offset by the state’s established flexibility to enact substantial reform.”

    Moody’s: Colorado’s Pension Costs and Funding Gaps Keep Growing Despite Benefit Reforms.

    http://bondcasebriefs.com/2015/03/17/news/moodys-colorados-pension-costs-and-funding-gaps-keep-growing-despite-benefit-reforms/

  9. Al Moncrief says:

    IMPARTIAL MONTANA JUDGE REBUTS COLORADO JUDICIARY’S PENSION CONTRACT BREACH COVER UP.

    (Interestingly, the Montana Court Wrongly Believes that the Colorado PERA Statutory “Annual Benefit Increase” is Tied to the “Cost of Living,” When, in Fact, it is Identical to the Montana Pension Benefit.)

    This recent Montana District court decision draws a bright line under our historic and brazen Colorado pension theft that makes Madoff look like a pickpocket.

    From Helenair.com: “Retirees’ cost-of-living increases preserved.”

    “A state district court judge on Wednesday struck down a legislative attempt to cut the annual cost-of-living adjustments for retired state and local government employees.”

    “District Judge James Reynolds issued a permanent injunction blocking the attempt by the 2013 (Montana) Legislature to reduce what is known as the Guaranteed Annual Benefit Adjustment, or GABA, from 3 percent to 1 percent for retirees under the Montana Public Employees’ Retirement System (PERS).”

    “After the Legislature adjourned, the Association of Montana Retired Public Employees and four retirees filed the lawsuit challenging the cut in GABA.”

    (Colorado public sector unions joined in the campaign to break Colorado PERA pensioner contracts. Retirees generally don’t pay union dues.)

    Helenair.com:

    “’By reducing the GABA, the state has significantly decreased the benefit payments that retired public employees receive,’ Reynolds wrote Wednesday. ‘Decreasing benefits for those who have already given their entire working life to the state, benefits to which they are contractually entitled, is not reasonable or necessary when other broader remedies were available.’”

    “In his decision, Reynolds listed some other options available other than cutting the GABA that the Legislature could have used, citing the arguments of the retirees’ group.”

    “These included: extending the pension debt amortization period beyond 30 years, adopting the bill as proposed without the GABA reduction, increasing the employer’s contributions, making a one-time payment to PERS from the state general fund reserves, diverting money from other accounts such as the coal severance tax trust fund, the tobacco settlement trust fund or the Big Sky Economic Development trust fund into PERS, or raising revenue through tax increases.”

    (All of these options, including a prospective reduction of the rate at which PERA benefits accrue, that is, a reduction in the PERA pension “multiplier” going forward, were available to the Colorado politicians who broke the Colorado PERA ABI contract.)

    Helenair.com:

    “‘The court thus concludes that reducing the GABA was not reasonable and necessary to achieve the legitimate purpose of maintaining actuarial soundness in PERS,’ Reynolds wrote. ‘The substantial impairment caused by Section 5 of House Bill 454, therefore, is in violation of the contract clause of both the Montana and U.S. Constitutions.’”

    “Reynolds said that he was persuaded that reducing GABA ‘constitutes a substantial impairment of retired public employees’ contract rights.’”

    “’From a strictly financial point of view, the reduction in the GABA would have a substantial effect on the total value of payments a retiree could receive over his or her retirement – thousands of dollars in some cases,’ Reynolds wrote.”

    “He said the publications distributed by the Montana Public Employees’ Retirement Administration made available to PERS members support the interpretation that the GABA is part of the members’ contract. Handbooks from PERS and workshops put on by its board did the same, he said.”

    “’These publications show that public employees were told before and after they retired that they could count on the GABA,’ Reynolds said.”

    (Colorado PERA publications demonstrating the contractual nature of the Colorado PERA ABI benefit are archived at the website: saveperacola.com.)

    http://helenair.com/news/local/retirees-cost-of-living-increases-preserved/article_89db3266-00a0-5893-bb81-1f313351b836.html

    Published comments on the Helenair.com article:

    “In terms of the state pension, the only reason it was ever in trouble is that the legislature and Administrations, both Democratic and Republican ignored their obligation to fund it adequately, both by raising state contributions and employee contributions. By assuming that the stock market would always be super healthy, they assured the program would ultimately be in crisis.”

    “I point out Bullock for his hypocrisy of being the one who introduced the amendment to cut GABA. On that day in April, 2013. He then vetoed it saying it was unconstitutional, as you say. So why did he drag everyone through it?”

    “Note to reporter. You start the article saying Reynolds struck down legislature’s attempt to cut cost of living adjustments, Reynolds specifically said they are not COLA’s but are a specific 3% amount guaranteed by the law.”

    (This ruse was quite useful in securing the Colorado Supreme Court’s political decision in the Colorado PERA public pension case, Justus v. State.)

    THE MONTANA DISTRICT COURT DECISION.

    Link to the Montana COLA (GABA) Decision:

    http://mpera.mt.gov/docs/GABAdecision2015.pdf

    Excerpts From the Montana Court Decision:

    “The GABA is not, strictly speaking, a cost-of-living adjustment (COLA) because it is not dependent on the actual cost of living at the time. Rather, the GABA is applied regardless of whether it is higher or lower than the change in the cost of living.”

    (This is a pertinent observation on the part of the Montana Judiciary that unaccountably escaped the Colorado Judiciary.)

    “Leading up to the 2013 legislative session, the funding ratio of the (Montana) PERS was 67 percent, meaning the fund was only able to meet 67 percent of its current liabilities.”

    (The Colorado PERA pension system had a 69 percent funded ratio at the time of the PERA ABI contract breach in 2010.)

    “AMRPE claims that HB 454 violates the contract clause of both the Montana and United States Constitutions because retired public employees have a contractual right to the GABA and, by unilaterally reducing the GABA, the legislature has impaired that right.”

    “Beneficial amendments automatically become part of an employee’s contract because acceptance of the modification is presumed, but acceptance cannot be presumed when a modification is detrimental to the employee.”

    (Another important observation by this Montana District Court judge.)

    “Montana’s Constitution has no such provision that directly addresses the contractual nature of public retirement benefits.” (Well, just like the Colorado Constitution.)

    “The (Colorado) Court compared the COLA statute to other laws it had previously determined created contractual rights, using words such as “entitled,” “future,” and “payable for the life of the retiree,” and noted that the COLA statute did not contain any such language. (Justus) Moreover, the Court noted that “[b]y its very nature a statutory cost of living adjustment is a periodic exercise of legislative discretion that takes account of changing economic conditions in the state and/or nation.” (Justus)

    (The Montana court is unaware that the Colorado statutory language creating the Colorado PERA base benefit contract is identical to the statutory language creating the Colorado PERA ABI benefit contract. Both contractual obligations “SHALL” be paid under Colorado statutes. How is it that ordinary public pensioners possess knowledge that court officials miss?)

    The Montana Court is Under the Impression that Colorado’s Statutory Annual Benefit Increase [ABI] is a COLA, When in Fact, It is Identical in Form to the Montana Pension GABA, a Fixed Statutory, Periodic Increase.

    Montana Court: “While these cases from other states are helpful to the Court’s analysis, none address an identical situation to that in the present case. The (Montana) GABA is not a COLA that is tied to economic factors outside the control of the legislature. It is a fixed percentage that compounds annually, regardless of market performance. In that sense, the GABA is unlike the COLAs in New Mexico, Maine, or Colorado which were not contractually protected because, in part, they were subject to the whims of the economy.”

    (The Montana court failed to consider the political nature of the Colorado court’s treatment of the ABI benefit in the case, Justus v. State and thus misinterpreted the legal status of the Colorado PERA ABI benefit.)

    “Once that enhancement was made, it became part of the contract.”

    (This is the historical, pre-contract breach campaign position, taken by Colorado PERA officials.)

    “The legislature did not reserve the right to reduce that enhancement in the future, nor did it declare that the GABA was not part of the contract. The legislature knew that public employees had a contractual right to retirement benefits and chose to guarantee an additional benefit beyond those in existence at the time.”

    (Evidence Ignored by the Colorado Supreme Court, Colorado PERA’s Former General Counsel and Current Executive Director:
    August 17, 2005, Rocky Mountain News:

    “His (Colorado PERA General Counsel Greg Smith) briefing paper said ‘there has never been a finding in Colorado that the state has reserved its power to make changes’ in PERA’s benefit structure.”

    “Smith said in his opinion that ‘other (non-Colorado) courts have set a high burden to meet the necessity threshold.'”

    “The PERA board, however, relying on a legal opinion by General Counsel Greg Smith, thinks benefits cannot be cut for any active PERA member. That means not just current retirees and workers who are eligible to retire but the brand-new employee who has put less than a year of contributions into the plan.”

    “Smith argued, however, that there is no precedent for declaring an actuarial emergency unless a pension fund has a serious cash liquidity problem.”

    http://m.rockymountainnews.com/news/2005/aug/17/span-classdeeplinksredpart-four-the-pera-puzzle/

    Again, Greg Smith:

    “Shrink the COLAs: ‘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.”

    http://www.denverpost.com/news/ci_11105271

    Back to the Montana Court Decision:

    “Given the structure and language of the relevant statutes, and the promises made to public employees, the Court concludes that the GABA is part of the contract between public employees and the state.”

    “The Court is persuaded that, by reducing in the GABA from three percent to 1 percent, HB 454 constitutes a substantial impairment of retired public employees’ contract rights. From a strictly financial point of view, the reduction in the GABA would have a substantial effect on the total value of payments a retiree could receive over his or her retirement-thousands of dollars in some cases.”

    “As described above, PERB distributed literature and held seminars and workshops that repeatedly assured employees that the GABA was guaranteed, not subject to the whims of the market, and something on which they could rely.

    Colorado PERA’s lawyers, December 16, 2009:

    Colorado PERA officials in written testimony to the Joint Budget Committee: “The General Assembly cannot decrease the COLA (absent actuarial necessity) because it is part of the contractual obligations that accrue under a pension plan protected under the Colorado Constitution Article II, Section 11 and the United States Constitution Article 1, Section 10 for vested contractual rights.”

    http://www.kentlambert.com/Files/PERA_JBC_Hearing_Responses-12-16-2009_Final.pdf)

    Montana Court:

    “Retired public employees reasonably expected that the GABA would not decrease, despite the fact that the GABA statute had been amended in the past, because the GABA had never been reduced, except for new hires.”

    In 2007, the Montana Legislature reduced the GABA to 1.5 percent for employees hired after January 1,2007. This further strengthens AMRPE’s reasonable expectation that the GABA, as applied to them, would not decrease.”

    (As we have observed over the last five years, similar legislation was adopted in Colorado in 2005, Colorado.)

    “Public employees have a legitimate expectation that the GABA is part of their contracts with the State, and a reduction in GABA substantially frustrates that expectation.

    “The burden is on the State to prove that the impairment was reasonable and necessary.”

    (Colorado PERA’s lawyers agreed with this point, until they shifted their legal strategy for PERA pension contract breach from “actuarial necessity” to simple denial of contractual obligations. The Colorado Judiciary circumvented this problem of having the defendants prove reasonableness and necessity by accepting the defendant’s suggestion that the court simply deny the existence of the PERA ABI contract, a contract which PERA’s lawyers and the sponsor of SB10-001 had previously acknowledged.)

    Note that the Montana court cites the federal case, US Trust, a case the Colorado Supreme Court artfully ignored:

    Montana District Court:

    “Though courts generally defer to the legislature’s judgment, in this case ‘complete deference to a legislative assessment of reasonableness is not appropriate because the State’s self-interest is at stake…. If a State could reduce its financial obligations whenever it wanted to spend the money for what it regarded as an important public purpose, the Contract Clause would provide no protection at all.” (US Trust)

    “Nevertheless, the cases both parties cite make clear the when the State is a party to the contract that is substantially impaired, complete deference to the legislature is inappropriate. And the State is clearly a party to the employment contracts of public employees. The Court, therefore, will not grant complete deference to the legislature and will instead apply a heightened level of scrutiny.”

    “Even if alternatives might be ‘politically more difficult,’ the State is limited in its ability ‘to abridge its contractual obligations without first pursuing other alternatives.'”

    “Decreasing benefits for those who have already given their entire working life to the State, benefits to which they are contractually entitled, is not reasonable or necessary, when other broader remedies were available.”

    “The substantial impairment of contract rights caused by Section 5 of HB 454, therefore, is in violation of the contract clause of both the Montana and United States Constitutions. AMRPE is entitled to summary judgment and a permanent injunction.”

    “The State is permanently enjoined from enforcing the amendments to § 19-3-1605, MCA, contained in section 5 of HB 454, reducing the GABA for retired public employees.”

    From the Montana PERA website:

    March 4, 2015

    “Judge Reynolds today granted PERS retirees’ request for a permanent injunction to prevent the Board from implementing the decrease in GABA under Section 5 of House Bill 454 (2013).”

    “The Judge ruled that the PERS retirees have a contract right to the GABA increases and that the State’s reduction of the GABA to address the actuarial soundness of PERS was not ‘reasonable and necessary’ and thus violated the contract clauses of the Montana and the US Constitutions.”

    http://mpera.mt.gov/perslawsuitamrpe.shtml

    For reference, I provide links to a few previous ColoradoPols.com articles addressing the attempted governmental theft of the Montana retiree’s GABA pension benefit:

    http://coloradopols.com/diary/41512/montana-governor-likely-to-sign-a-pension-reform-bill-he-believes-is-unconstitutional#sthash.1Y5eOS6k.dpbs

    http://coloradopols.com/diary/46521/montana-retiree-cola-theft-lawsuit-progressing-colorado-pera-retiree-cola-theft-lawsuit-cert-petition-pending#sthash.1bmBRUM8.dpbs

    http://coloradopols.com/diary/44462/montana-public-sector-unions-to-sue-over-pension-cola-theft-colorados-unions-supported-the-taking-of-the-contracted-colorado-pera-cola-benefit-from-pensioners#sthash.Hmot55ms.dpbs

    Readers should note that protections afforded to public pensioners by the US Constitution vary dramatically depending on which side of a state line a pensioner happens to be standing. To wit:

    http://coloradopols.com/diary/64487/the-colorado-supreme-court-politicians-in-black-robes-as-it-turns-out#sthash.XwxTOij1.dpbs

  10. Al Moncrief says:

    Colorado PERA’s Executive Director: Politician or Fiduciary?

    Association of State Retirement Administrators: Colorado PERA Pension Has 5th Worse Funding Discipline in the Nation.

    The Executive Director of Colorado’s largest public pension plan (Greg Smith of Colorado PERA) knows quite well that the pension plan he leads has a lower level of funding (funded in the low 60 percent range) than is needed to meet the pension system’s long-term financial obligations. Greg Smith knows that the payments received by the PERA pension system from its state and local governmental sponsors, since 2002, have been well below the funding levels calculated by Colorado PERA’s own actuaries as necessary to maintain the solvency of the pension system. Executive Director Greg Smith represents a board of fiduciaries, the Colorado PERA Board of Trustees.

    Yet, Greg Smith recently testified to the Colorado Legislature that the pension system requires no “additional contributions.” In my opinion, the Colorado PERA pension system (a Colorado state agency) must have a leader who will speak the truth to Colorado’s state and local elected officials, rather than a leader who seeks to perpetuate financial mismanagement of the pension system.

    Historically, the fact that Colorado PERA officials have acted in a political manner rather than as fiduciaries is largely responsible for the decline in the pension system’s funded ratio. (Note the past unanimous support of the PERA Board of Trustees for Governor Bill Owens PERA “service credit fire sale,” and the fact that state agency Colorado PERA has spent many millions of trust fund dollars on lobbyists and political/public relations campaigns.) Colorado does not need a “politician” at the helm of this state agency. Colorado PERA members desperately require a pension leader who will consistently act as a fiduciary. This public pension system itself cries out for greater oversight.

    http://coloradopols.com/diary/69033/colorado-peras-executive-director-a-compulsive-liar-be-the-judge#sthash.WHfbUBgE.dpbs

    Executive Director Greg Smith contradicting Executive Director Greg Smith.

    On December 11, 2014, Colorado PERA’s Executive Director Greg Smith testified to the Colorado General Assembly’s Joint Budget Committee: “We don’t need additional contributions.”

    On August 11, 2009, at the Denver meeting of the Colorado PERA “Listening Tour” Colorado PERA’s (then) General Counsel Greg Smith blamed the Colorado General Assembly for the decline PERA’s actuarial funded ratio: “We have not been paid what’s called the actuarially required contribution.” “We’ve not been receiving that full contribution in any of our divisions for many years . . . seven years to be specific.”

    http://www.copera.org/pera/about/listeningtour.htm

    Colorado PERA’s Greg Smith may very well be alone in the nation in that he, as a fiduciary who heads a major public pension system that has been grossly and historically underfunded, testifies to elected officials overseeing the pension system “we don’t need additional contributions.”

    http://coloradopols.com/diary/66484/colorado-pera-fiduciaries-severely-underfunded-but-see-no-problem#sthash.VIa8SL5T.dpbs

    Note the testimony of the previous Executive Director of Colorado PERA (Meredith Williams) to the Colorado Legislature’s House Finance Committee on February 23, 2012 (relating to the Legislature’s historical underfunding of its PERA pension obligations):

    “We’ve had a significant problem over the years, in that . . . contributions, payments by (PERA) employers into PERA have been kind of the last thing in the budget building process, and we have not made the required payments. Unfortunately, in our line of work, where we’re involved in compounding shortfalls grow, particularly when the shortfalls continue year after year after year.”

    I ask: Were Colorado PERA officials speaking the truth to Colorado legislators on February 23, 2012 when [then] Colorado PERA General Manager Meredith Williams, testified to the Colorado House Finance Committee “We’ve had a significant problem over the years, in that . . . contributions, payments by (PERA) employers into PERA have been kind of the last thing in the budget building process, and we have not made the required payments. Unfortunately, in our line of work, where we’re involved in compounding shortfalls grow, particularly when the shortfalls continue year after year after year.”

    Or, were Colorado PERA officials speaking the truth to Colorado legislators on December 11, 2014 when JBC members heard from Colorado PERA that “we don’t need additional contributions”?
    Logically, only one of these Colorado PERA statements to Colorado state legislators can be true.

    http://coloradopols.com/diary/66279/colorado-pera-officials-corrupt-state-budget-process-joint-budget-committee-analyst-silenced

    The National Association of State Retirement Administrators (NASRA) recently released a study addressing the extent to which public pension plan sponsors in the United States have made “actuarially required contributions” (ARC) to the pension plans.

    From the Colorado Springs Business Journal: “Colorado Ranks 46th for Pension Funding”:

    “Colorado has made 74.5 percent of its annual required contribution to its public employee retirement plans from 2001 through 2013, placing it 46th in terms of average state pension funding, a report suggests.”

    “While most U.S. states are meeting their pension commitments, a report by the National Association of State Retirement Administrators shows Colorado has lagged for more than a decade.”

    “Colorado placed behind New Jersey, Pennsylvania, Washington, North Dakota and Kansas, and is just ahead of Virginia, Illinois and Oklahoma, according to the report. The report also included the District of Columbia.”

    “The report, ‘Spotlight on The ARC Experience of State Retirement Plans, FY 01 to FY 13,’ examines how state governments performed meeting the annual required contribution (ARC) of their public employee retirement plans,” according to NASRA. It details the ARC experience of 112 state-wide and state-sponsored public pension plans in the U.S. Together, these plans account for more than 80 percent of all public pension assets and participants.”

    http://csbj.com/2015/03/13/report-colorado-ranked-46th-for-pension-funding/

    Link to the NASRA Report:

    http://www.nasra.org/files/JointPublications/NASRA_ARC_Spotlight.pdf

    Excerpts from the NASRA Report:

    “A government that has paid the ARC in full has made an appropriation to the pension trust to cover the benefits accrued that year and to pay down a portion of any liabilities that were not pre-funded in previous years. Assuming projections of actuarial experience hold true, an allocation short of the full ARC means the unfunded liability will grow and require greater contributions in future years.”

    “The annual required contribution, or ARC, refers to the amount needed to be contributed by employers to adequately fund a public pension plan. The ARC is the sum of two factors: a) the cost of pension benefits being accrued in the current year (known as the normal cost), plus b) the cost to amortize, or pay off, the plan’s unfunded liability. The ARC is the required employer contribution after accounting for other revenue, chiefly expected investment earnings and contributions from employee participants.”

    “NASRA compiled comprehensive information regarding the ARC experience of 112 state-sponsored and statewide public pension plans in the U.S. for fiscal years 2001 through 2013. Together, these plans account for more than 80 percent of all public pension assets and participants in the U.S.”

    “Only a few states have conspicuously failed to adequately fund their pension plans.”

    “Most states made a good-faith effort to fund their pension plans; a good-faith effort is defined here as paying 95 percent or more of the ARC.”

    “Failing to make even a good-faith effort to fund the ARC increases future costs of funding the pension.”

    “The median ARC experience is 95.1 percent, meaning that one-half of the plans received at least 95.1 percent of their required contributions.”

    “All but six states paid at least 75 percent of their ARC.”

    The Disparity of Colorado PERA Governmental Employer Contribution Legal Frameworks:

    “For the Colorado Affiliated Local plan, statutes require employers to fund the actuarially determined contribution. Employers who participate in the Municipal, School, State, and Denver Public Schools plans under the Colorado Public Employees’ Retirement Association contribute a fixed percentage of compensation specified in statutes.”

    (My comment: Public pension plans that rely on fixed statutory contribution rates, like Colorado PERA, rather than regularly paying the pension’s full ARC have the lowest funded ratios.)

    The Colorado PERA State Division has paid only 67.5 percent of its ARC requirement [FY05-FY13.]

    http://www.nasra.org/files/JointPublications/NASRA_ARC_Spotlight.pdf

    A few years ago, Colorado PERA officials and their hired lobbyists argued that the PERA public pension system’s 69 percent funded ratio was such a crisis that the contracts of Colorado PERA pensioners just had to be broken. They contended that the Colorado PERA pension system’s 69 percent funded level constituted an “actuarial emergency” that justified the breach of Colorado PERA retiree pension contracts.

    December 16, 2009:

    Colorado PERA officials in written testimony to the Joint Budget Committee: “The General Assembly cannot decrease the COLA (absent actuarial necessity) because it is part of the contractual obligations that accrue under a pension plan protected under the Colorado Constitution Article II, Section 11 and the United States Constitution Article 1, Section 10 for vested contractual rights.”

    http://www.kentlambert.com/Files/PERA_JBC_Hearing_Responses-12-16-2009_Final.pdf

    In spite of the fact that Colorado PERA officials had previously admitted to the existence of the PERA “ABI” (COLA) contractual obligation, these officials hired lobbyists to enact a bill to break the contract. In 2010, the Colorado Legislature (with help from 27 lobbyists) passed the bill, in effect asking the Colorado Supreme Court for the political favor of ignoring their own court’s precedent to break the contract. The Colorado Supreme Court, as a political entity itself, obliged. Since Colorado courts refused to grant discovery in the case, PERA’s claims of an actuarial emergency received no judicial scrutiny. This is our government theoretically constrained by the Colorado and US Constitutions.

    http://coloradopols.com/diary/64487/the-colorado-supreme-court-politicians-in-black-robes-as-it-turns-out#sthash.gcpgGTWh.dpbs

  11. Al Moncrief says:

    FORMER COLORADO SPRINGS PERA MEMBERS SUE CITY.

    From Plan Sponsor: “Hospital Employees Sue Colorado Springs for Colorado PERA Pension.”

    “A lawsuit claims the City of Colorado Springs’ termination of Memorial Health System’s affiliation with the state pension system violated state law.”

    “Employees of Memorial Health System, owned by the City of Colorado Springs, Colorado, have sued the city, claiming they were unlawfully removed from the state’s Public Employees Retirement Association (PERA) and subsequently not given promised benefits.”

    “Prior to termination of the City’s administration of Memorial, Memorial employees were repeatedly told that when PERA affiliation was terminated, their pension plan would be replaced by another plan that would be at least as good as the PERA benefit plan.”

    “The lawsuit alleges the new employee pension benefit plan for Memorial employees after October 1, 2012, is inferior to the benefits they would have accrued under PERA.”

    “For Memorial employees (except the Children’s Hospital sublease employees) the retirement benefits accrue at the rate of only approximately 1% of the average of the highest five years of service per additional year of service, instead of 2.5% of the average of the highest three years of service under PERA.”

    (This rate of accrual of PERA benefits is called the pension “multiplier.” In 2010, rather than PROSPECTIVELY reducing this PERA pension multiplier from a 2.5 percent level for PERA benefits not yet accrued, the sponsors of SB10-001 sought a RETROSPECTIVE reduction of Colorado PERA pension [ABI] COLA benefits that had already accrued, that is, PERA pension benefits that had already been earned by Colorado PERA retirees. SB10-001 was challenged in court [Justus v. State] and ultimately blessed by a Colorado Supreme Court that: disregarded 50-year old Colorado public pension precedent, ignored federal case law [US Trust,] ignored ubiquitous evidence of the contract, and failed to conduct a “contract analysis” . . . all of this to summarily eliminate legal Colorado governmental debts. The plaintiffs, Colorado PERA retirees, had exchanged years of labor and pension contributions for this ABI benefit. How did the Colorado Supreme Court justices reach the conclusion that Colorado PERA members do not exchange their labor and contributions for the ABI benefit? In their superficial, state-serving review, the justices did not address this question.)

    Plan Sponsor:

    “In addition, as newly minted private-sector employees, these employees now must contribute to and qualify for Social Security. They have not accrued Social Security credits because previously they did not contribute to Social Security.”

    (The Colorado PERA pension system is theoretically a replacement for Social Security. The Colorado PERA pension system is theoretically a “qualified” public pension plan under the Internal Revenue Code. “Qualified public pension plans” must have “definitely determinable” benefits under the Internal Revenue Code. The Colorado Supreme Court recently ruled in [willful?] ignorance of this federal requirement. Evidence and law are much easier to bury when no trial or discovery are allowed.)

    Plan Sponsor:

    “’These differences amount to tens of thousands, or even hundreds of thousands of dollars per employee, in lost retirement benefits,’ the lawsuit says.”

    “The lawusit is filed on behalf of all affected employees, and the city has acknowledged that approximately 4,000 or more such employees of Memorial Hospital existed as of October 1, 2012.”

    Complete article at PlanSponsor:

    http://www.plansponsor.com/Hospital_Employees_Sue_Colorado_…

    The complaint, Romstad v. City of Colorado Springs:

    http://www.plansponsor.com/…/RomstadvCityofColoradoSprings.…

    http://coloradopols.com/…/the-colorado-supreme-court-politi…
    “Friend” Save Pera Cola on Facebook.

    • saveperacola says:

      Still to be discussed is the issue of significant GPO/WEP reductions that will occur in hospital retirees’ Social Security benefits. They will now be paying into Social Security, but when they apply for retirement benefits, they will find that the SS benefits are seriously reduced by having paid into PERA without simultaneously paying into SS for many years. The reduction can be up to about half of the SS benefit. If a spouse is receiving a PERA beneficiary monthly check, that means his/her SS spousal benefit can be reduced to zero. Hospital employees need to investigate this soon! Search GPO/WEP on the Social Security website.

  12. Al Moncrief says:

    NEW JERSEY UNIONS FIGHT IN COURT OVER PENSION ARC CONTRIBUTIONS, COLORADO PERA FIDUCIARIES ARGUE ARCS NEED NOT BE PAID.

    “(New Jersey Governor) Christie has said the pension cuts (failure to pay public pension ‘actuarially required contributions, ARC’) were necessary to balance the state’s budget and that ‘there are no alternatives’ to such reductions. At the same time, he has backed record amounts of new corporate tax subsidies — some of which flowed to Republican campaign contributors. He has also vetoed legislation to increase taxes on income above $1 million. That legislation was projected to raise $1.1 billion, which proponents said would have allowed the state to make its required pension contribution.”

    http://coloradopols.com/…/colorado-pera-fiduciaries-severel…

    http://www.ibtimes.com/chris-christie-court-overturns-new-j…

    Today (2/23/2015), the Superior Court of New Jersey forced the State of New Jersey to abide by a recently enacted statutory requirement that public pension ARCs be paid. In Colorado, the issue of the payment of the Colorado PERA pension ARC isn’t even on the table. Colorado PERA’s Executive Director recently testified to the Colorado Joint Budget Committee that the PERA ARC need not be paid, i.e., he stated that, although the PERA ARC has not been paid for thirteen years in Colorado, and is not currently being paid, the PERA pension fund needs no additional contributions. As far as I can tell, Colorado PERA is the lone public pension system in the United States taking the position that public pension ARCs need not be paid. See the following article for Greg Smith’s testimony:

    http://coloradopols.com/…/colorado-pera-fiduciaries-severel…

    Link to the complete New Jersey court opinion:

    http://www.judiciary.state.nj.us/…/FINAL%20decision%202-23-…

    A few interesting excerpts from the New Jersey Court’s opinion:

    “And, history has shown that the public pension system and its members routinely have been targeted by administrations of both parties when budget problems arise.”
    “See Berg v. Christie . . .describing a ‘series of Executive and Legislative policy decisions’ that ‘resulted in underfunding of the pension systems’ and deciding whether a legislative act suspending cost of living adjustments for current and future retirees violated the contract clause.”

    “Now, for the first time, Chapter 78 expressly provides that members of the public pension systems ‘shall have a contractual right to the annual required contribution amount being made by the member’s employer or by any other public entity.’”

    “The Legislature directed that the required contributions be made annually on a timely basis ‘to help ensure that the retirement system is securely funded and that the retirement benefits to which the members are entitled by statute and in consideration for their public service and in compensation for their work will be paid upon retirement.’”

    “Indeed, the Governor himself characterized this pension legislation as constituting ‘historic reforms’ that ‘bring to an end years of broken promises and fiscal mismanagement by securing the long-term solvency of the pension and benefit systems.’”

    “Under the statutory framework requiring employer contributions, the State is required to make an ‘annually required contribution’ (ARC) which is composed of the ‘annual normal contribution’ and the ‘annual unfunded accrued actuarial liability contribution’ (UAAL).”

    “The State has failed to pay its full ARC every year from FY 1997 to 2012.”

    “The State’s continued failure to make the full ARC payment results in exponential growth in the UAAL through both lost contributions and lost expected return on the investment of the contributions.”

    “Courts in New Jersey have consistently viewed pension payments as a form of ‘deferred compensation’ that an employee earns for prior service. (‘Deferred compensation benefits have been earned by an employee and are no longer considered a gratuity.”)

    “Pension statutes should be liberally construed . . . because they represent deferred compensation for a government employee’s service.”

    “Despite the broad reach of the doctrine of sovereign immunity, there are several exceptions to the doctrine. For example, the doctrine does not apply if a plaintiff seeks relief from state laws that violate the Federal Constitution.”

    “This court and the United States District Court for the District of New Jersey previously held in a similar suit brought by the NJEA, challenging Chapter 78’s suspension of the COLAs and seeking enforcement of plaintiffs’ contracts with the State, that these types of claims essentially seek specific performance of their contracts with the State.”

    “As these two decisions explain, actions seeking specific performance of a contract do not fall under Ex parte Young’s exception from the doctrine of sovereign immunity, largely because they seek retroactive, rather than prospective, relief.”

    “Notably, both the Federal and the State Contract Clauses speak of a violation of the Clause’s guarantee as an ‘impairment.’ Consequently, when the Legislature chose to use the term ‘impairment’ in Chapter 78, it did not intend to limit plaintiffs’ constitutional protections to the New Jersey State Constitution.”

    “Like any private party to a contract, then, the State may repudiate a contract, as long as it is willing to pay the damages resulting from the breach.”

    “Consequently, although plaintiffs’ Federal Contract Clause claims are not necessary to the outcome of this case, the court concludes that plaintiffs have properly asserted claims arising under the Federal Constitution, which support their parallel claims arising under the New Jersey Constitution.”

    “The court is unwilling to rely on what has now become a succession of empty promises. Defendants’ assertions about the health of the fund also do not take into account the fact that the State’s failure to make its payments in a timely fashion results in the loss of interest on the investment of money that otherwise should have been put into the pension funds. The continued failure to make timely payments therefore causes the unfunded liability to increase exponentially.”

    “Further, after a State binds itself in a contract, ‘a State is not completely free to consider impairing the obligations of its own contracts on a par with other policy alternatives.U.S. Trust Co.”

    “Although a state’s asserted justifications for impairing private contractual obligations are typically given significant deference by the courts, less deference is accorded to a state in regard to public contracts because a state’s self-interest is at stake.”

    ” . . . a contract impairment will be considered unreasonable if the State considered impairment of the contract right “on a par with other policy alternatives. U.S. Trust”

    “The court cannot allow the State to simply turn its back on its obligations to New Jersey’s public employees–especially in light of the fact that the State’s failure to make its full payment constitutes a substantial blow to the solvency of the pension funds in violation of plaintiffs’ constitutional rights, and due to the fact that the terms of the UAAL payments were set forth–and even publicly endorsed–by the Governor himself.”

    “The complaints raise a number of other claims that were not argued by plaintiffs either in the moving briefs or in the reply briefs. For example, the complaints allege estoppel, unconstitutional taking, breach of the implied covenant of good faith and fair dealing,”

    http://www.judiciary.state.nj.us/…/FINAL%20decision%202-23-…

    “Friend” Save Pera Cola on Facebook. Put an end to official deception by Colorado governmental agencies.

  13. Al Moncrief says:

    COLORADO PERA: FORCING PERA RETIREES TO EAT 90 PERCENT OF THE COSTS OF THE 2010 PERA REFORM BILL WAS “SENSITIVE,” AND AN “EQUITABLE DISTRIBUTION” OF THE “BURDEN.”

    Yes Dear Reader, in 2010, a juggernaut of 27 Colorado statehouse lobbyists “sensitively” forced the PERA reform bill (SB10-001) through the legislative process.

    The propaganda produced by our Colorado state pension administrative agency, Colorado PERA, simply boggles the mind. It is boundless . . . and unconstrained by normal human decency.

    Allow me to translate this recent Colorado PERA propaganda piece: Colorado PERA officials recently argued, on their website, that using PERA trust funds (in part, the property of PERA retirees) to pay for public relations, lobbying, and legal campaigns to take the retirees’ accrued statutory PERA benefits (benefits that PERA officials have, in legislative testimony, confirmed as PERA contractual obligations) and thus push 90 percent of the cost of the 2010 PERA reform bill onto the backs of these elderly PERA retirees, was “sensitive,” and an equitable distribution of costs.”

    Elderly PERA retirees eat 90 percent, PERA employers and taxpayers bear ten percent of the burden. This is the Colorado PERA definition of “equitable?”

    In my opinion, Colorado PERA officials are now capable of writing anything, without compunction. No other Colorado state agency can approach this Colorado PERA propaganda talent.

    http://coloradopols.com/diary/64487/the-colorado-supreme-court-politicians-in-black-robes-as-it-turns-out

    A few days ago this statement was posted on Colorado PERA’s website:

    “The goal of the General Assembly’s reforms enacted in 2010 was for PERA to achieve fully funded status – thus ensuring retirement security – WITH SENSITIVITY TO THE EQUITABLE DISTRIBUTION OF COSTS AND BURDENS ASSOCIATED WITH THE REFORMS.” (My emphasis in caps.)

    https://www.copera.org/about/pera-on-the-issues/conversations-about-colorado%E2%80%99s-public-employee-retirement-system-should

    Implicit in this Colorado PERA statement is a belief that accrued Colorado PERA ABI (COLA) benefits ARE NOT a Colorado PERA contractual obligation. Surely, Colorado PERA officials do not believe that the breach of a public pension contract can be “equitable,” or “sensitive.”

    If Colorado PERA officials believe that the statutory PERA ABI benefit is not a Colorado PERA contractual obligation, then why did they provide this perfectly contradictory legislative testimony in 2009?

    December 16, 2009

    Colorado PERA officials in written testimony to the Joint Budget Committee: “The General Assembly cannot decrease the COLA (absent actuarial necessity) because it is part of the contractual obligations that accrue under a pension plan protected under the Colorado Constitution Article II, Section 11 and the United States Constitution Article 1, Section 10 for vested contractual rights.”

    http://www.kentlambert.com/Files/PERA_JBC_Hearing_Responses-12-16-2009_Final.pdf

    PERA RETIREES WILL EAT 90 PERCENT OF THE COSTS OF THE 2010 REFORM: COLORADO PERA OFFICIALS, SB10-001 BILL SPONSORS.

    January 22, 2010

    SB10-001 co-prime sponsor Senator Josh Penry and bill sponsor Senator Greg Brophy: “Fully 90 percent of the PERA fix comes from benefit cuts to current and future retirees.”

    http://www.denverpost.com/search/ci_14242354

    January 26, 2010

    “The difference between the past approach and SB1, Penry said, is that the new plan boldly tackles benefit reductions, which he said will constitute 90 percent of the PERA fund’s recovery and generate plenty of opposition along the way.”

    http://www.chieftain.com/news/local/legislators-pera-changes-will-be-painful/article_b82cee28-328f-59ba-91c0-a480e5f719c8.html

    October 26, 2011

    Colorado PERA Executive Director Greg Smith, at the “Fall 2011 PERA Shareholder’s Meeting,” (thirty-six minutes into the video):”‘Only ten percent of the fix” of the [SB10-001] reforms in 2010 came from additional employer contributions.”

    April 17, 2011

    Senator Brandon Shaffer, co-prime sponsor, SB10-001, Denver Post: “I sponsored last year’s legislation, known as Senate Bill 1, to protect PERA. The bill required shared sacrifice, but frankly most of it — 90 percent of the burden — falls on the shoulders of PERA’s current and future members and retirees.”

    http://www.denverpost.com/opinion/ci_17858107

    May 29, 2011

    Colorado PERA Executive Director Meredith Williams, Pueblo Chieftain:

    “In fact, about 90 percent of the changes enacted by Senate Bill 1 are falling on the shoulders of current and future PERA members and retirees — not other taxpayers.”

    http://www.chieftain.com/opinion/ideas/legislative-changes-have-put-pera-fund-on-a-solid-footing/article_3080a01c-88cd-11e0-ad01-001cc4c03286.html

    We see above that Colorado PERA officials have testified that the PERA statutory ABI (COLA) benefit is a Colorado PERA contractual obligation. (For the record, this evidence was conveniently ignored by the Colorado Supreme Court in its 2014 Decision in the case, Justus v. State.) In 2014, Colorado state government forgave Colorado state government debt.

    “The Colorado Supreme Court: Politicians in Black Robes.”

    http://coloradopols.com/diary/64487/the-colorado-supreme-court-politicians-in-black-robes-as-it-turns-out

    It is critical to the proper functioning of a democratic republic that truth be widely disseminated. “Friend” Save Pera Cola on Facebook.

  14. Stan Brown says:

    Colorado Senate Republicans are supporting a PERA “reform” bill which will increase the unfunded liability. Surely they realize there will be another “reverse” PERA bailout similar to SB10-1 when there’s indequate pension funding. By reverse bailout I mean that PERA retirees and members will bail out the fund due to legislative mismanagement and malfeasance.

    I find it interesting that PERA detractors keep stating that SB10-1 now places a limit on the annual cost-of-living increase. The truth is that there was a limit before SB10-1 … a fixed, guaranteed 3.5%.

    http://www.durangoherald.com/article/20150213/NEWS01/150219828/Senate-debates-retirement-reform-

    Excerpts:

    “Interest in PERA peaked as reports revealed that the system is carrying at least $25 billion in unfunded liabilities. Lawmakers addressed its stability in 2010 by requiring an increase in the employer and employee contribution rates to PERA, as well as a limit on the annual cost-of-living increase.”

    “But Hill said the system is still unstable, and that employees should have the option of controlling their own investments.”

    ““The notion right now that PERA is this bastion of stability is unfortunately ill founded,” Hill said.”

    “Democrats, however, were in a tizzy over the measure. They pointed to a fiscal analysis that indicated that the change would increase PERA’s unfunded liabilities.”

    “State fiscal analysts said the bill could add about $4.2 billion to PERA’s unfunded liability.”

    ““It takes us in the wrong direction,” Senate Democratic Leader Morgan Carroll of Aurora said of the bill. “It reduces retirement security.””

    “Democrats worry that the measure would result in uncertain benefits because calculations would be based on investment gains and losses.”

    • Randy Storm says:

      “State fiscal analysts said the bill could add about $4.2 billion to PERA’s unfunded liability.”

      It seems that adding to PERA’s unfunded liability could be contrary to TABOR. Does this sound like a possible contradiction?

    • Richard Allen says:

      If letting individuals choose a DC plan increases the unfunded liability, it can only be because the continued contributions are needed to bail out PERA. Continuing participation in the DB plan, of course, also generates liabilities but not as many as the contributions plus earnings on the contributions. Remembering that the employers also make contributions (though not enough), lets the end game be seen. Keep the employees participating, keep underfunding the plan and then cut benefits again. DC accounts are harder to steal than DB contracts. Public employees therefore must not be allowed to escape the rigged game.

  15. Al Moncrief says:

    COLORADO PERA’S GREG SMITH: SB10-001 RESULTED FROM THE FAILURE OF THE LEGISLATURE TO ACTUALLY PAY FOR PERA PENSION SYSTEM BENEFITS.

    From the February 10, 2015 Senate Finance testimony on SB15-080 concerning participation in PERA’s defined contribution plan.

    Ben Moultrie, AARP, a volunteer advocate with AARP:

    “The AARP strongly believes that Americans are faced with a crisis where the goal of receiving adequate and secure retirement income is becoming increasingly difficult.”

    (This is a somewhat ironic statement from the AARP given that the organization stood by and watched in 2010, said nothing, as the Colorado Legislature demolished the “secure retirement income” of Colorado PERA retirees through breach of ABI statutory contracts that were supported by long-standing Colorado case law . . . case law that was not mentioned in the Denver District Court decision in the case Justus v. State, that was subsequently embraced by the Colorado Supreme Court.)

    Greg Smith, PERA Executive Director, testified at this bill hearing that the objective of SB10-001 “was to deal with an unfunded liability that had developed from a period of years of not paying for the promises that were being made . . . ”

    “the biggest portion (of the reforms in SB10-001) was the reduction of the cost-of-living adjustment not only for future retirees, but for existing retirees many of whom gave up years worth of benefits in the nature of those lost COLAs . . .”

    (Greg Smith stated that SB10-001 was necessary due to the failure of the Colorado Legislature to pay the PERA pension system’s bills [actuarially required contributions, ARC]. He made no mention of the fact that the Colorado Legislature is not currently paying the PERA pension system’s ARC, and has not paid the ARC since 2002.)

    http://states.aarp.org/contact-the-colorado-state-office/

    Link to audio recording of the hearing:

    http://www.leg.state.co.us/clics/cslFrontPages.nsf/Audio?OpenPage

  16. deborahapy says:

    It was truly disappointing to see this effort come to an end, but my sincere thanks to Gary Justus, Rich Allen and everyone else who put forth the time, energy and commitment to fight for all of us. I have great respect for you.

    A question re finances: Are all of your expenses to date covered? Do you need any further donations?

  17. Stan Brown says:

    It has become obvious that PERA retirees need to organize and become more involved in the political process, individually and as a group. For example, Oregon PERS retirees (http://www.opri.org/) have done a tremendous job in protecting their “earned” benefits. A little google search will provide the details. However, they have the support of major public employee unions.

  18. barrythorpe says:

    Well, that’s the problem…..it’s not as benign as a broken promise, it’s breach of contract. How is it that we in the plaintiff “class” don’t have a say in the matter of appeal ? Seriously, we contributed and supported for four years. We got a judgement that it is a contract, and since it is, it constitutes a breach. Also need to revisit the issue of it being a ” taking ” . I do not buy the failure to appeal because the issue deals with State law, look at the gay marriage issue in states that was found unconstitutional by the Feds. How is it that thousands of affected retirees don’t have a say going forward? If the named plaintiffs want out, fine, but how can that decision be made without input from the rest of us?
    You say ” that every individual should be prepared to be self-reliant, and to not be dependent on an external entity for their future financial support.”….With all due respect, I don’t consider a lifetime career with a contracted pension to be relying on an outside entity. I earned every penny by playing by their contractual rules. Who can just “not rely ” on their income, unless they are born ultra wealthy? Where does one get the money for financial independence when they are forced to contribute to the pension system? ROTHs are fine, but PERA owes me (and you ) the amount that they stated by contract. That’s the issue here, money was TAKEN every month for pension and ABI. Not one of us would have continued in that system, contributing every paycheck if not bound by MUTUAL contractual responsibilities. Yes a broken “promise” is hurtful, but a broken “contract” entitles us to legal remedy.

    • saveperacola says:

      Barry wrote: “How is it that we in the plaintiff “class” don’t have a say in the matter of appeal ?”

      Gary replies: The class was never certified by the district court Judge Robert Hyatt. Therefore, only the four plaintiffs had standing to make that decision in this law suit.

      The court of appeals did say it was a contract, but the supreme court nullified that by saying that there never was a contract. So, at this point the only remedies are an appeal to the U.S. Supreme Court, or for someone to file a new lawsuit that would bypass the question of there being a contractual relationship for ABI since the CSC has already said there was not one.

      I am not at all pleased with the CSC’s logic or decision in this case. Algy Moncrief has well documented both the dynamics of the SB1 passage and web of relationships between the PERA, government, law firm and union players in this pension theft. There is no trust left for these people who sold out retired public employees-whether they were well-intentioned or not. Sadly, this effort to do the same in other states continues at various levels of the legal process (e.g. Illinois).

      We must move on to what we can do in other ways.

      • barrythorpe says:

        Thanks, that at least answers that one question, I never knew that all this was only officially on behalf of the named plaintiffs.

  19. Chris says:

    Other States will now scramble to break similar promises to their own already-retired public employees. Watch.

    The only glimmer of hope remaining for us, as far as I can see, is for employees in some other State taking their own case to the US Supreme Court, winning, and then that Court decision applying to us as well because our cases were sufficiently similar.

    Yeah, I know, don’t hold your breath…

    • Richard Allen says:

      Other states already have broken their promises. Rhode Island, New Jersey, Minnesota, South Dakota. Illinois is trying. Probably others I can’t remember right now. Not to mention the retroactive change to ERISA that allowed multi-employer private plans to break their promises. Trust me that Gary and I are as unhappy as any of you. Other approaches how have more chance for success than an appeal to the US court.

  20. Stan Brown says:

    It’s false advertising to describe our benefit as a DB plan. Our promised, guaranteed annual increase of 3.5% became history in 2010, along with any semblance of long-term inflation protection. I would advise active PERA members to work until their mid-60s and to be skeptical about any promised benefits going forward. It’s now a gratuity plan governed by public sentiment and legislative whim.

    • George Kahler says:

      Right on MAN!

      • Richard Allen says:

        Indeed. People should consider whether a gratuity plan is better than a DC plan. At least in DC plans, you own the assets.

      • George Kahler says:

        Changing the definition of a Defined Benefit after one has accepted these definitions is what should have been litigated from the start. Annual Benefit Increase the reason this was used is because you really do not have any wiggle room when it comes to the definition of the words. As we all know 2010 had no ABI. Pera is still using this but will phase it out eventually. Does anyone know why they call those who have retired as having a vested pension? I think it is because back in the dark ages of honest government once something was in ones vest pocket it was yours and only could be taken by theft.

  21. Steve says:

    Hopefully, people in the future who have PERA or any other state run pension plan will learn not to trust the politicians or the powers that be about promises made concerning payments to retirees. Everything these rascals say should be taken with a grain of salt. They made promises to PERA based employees, and in the end lied and reneged on those promises. An important lesson learned in this whole matter is that every individual should be prepared to be self-reliant, and to not be dependent on an external entity for their future financial support. There is a lot to be said about the ROTH IRA and similar ways to save for retirement.

  22. Nancy Higgins says:

    Yup we are stuck with what we got! How are you feeling? n

    Sent from my iPad

    >

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