Can they legally reduce your pension benefits once they are vested? A class action lawsuit in Colorado might just tell us something in Ohio!
From John Curry, March 2, 2010
Note from John....this pretty well sums up what RH Jones has been telling us all along!!!!!!!!!!
"Both the United States and Colorado Constitutions bar reductions in pension benefits once the right to those pension (benefits) vests. And that is exactly what the legislature did here," attorney Stephen M. Pincus said in the release."The attorneys said some retirees will lose more than $165,000 over the next two decades because the legislation reduces the annual cost-of-living raise from 3.5 percent to 2 percent annually, with no increase this year."
PERA benefit cuts bring expected class-action lawsuit
By Lynn Bartels
The Denver Post, February 27, 2010
The Denver Post, February 27, 2010
A class-action lawsuit filed Friday claims pension legislation signed into law this week is unconstitutional because it reduces benefits promised to retired government employees.
The legal challenge, just three days after Gov. Bill Ritter signed Senate Bill 1, comes as no surprise.
Lawmakers who backed legislation aimed at rescuing the Public Employees Retirement Association have said all along they expected a challenge.
The lawsuit was filed in Denver District Court by Gary Justus, a retired Denver Public Schools math teacher; and Kathleen Hancock, a retired Colorado Department of Labor employee.
They are represented by a Pennsylvania law firm that has filed similar suits in other states, and by Colorado attorney Richard Rosenblatt.
In a news release, the attorneys said the suit also was filed on behalf of approximately 100,000 PERA members who became eligible to retire or who have retired since March 1, 1994, when annual pension increases were first guaranteed under state law.
"Both the United States and Colorado Constitutions bar reductions in pension benefits once the right to those pension (benefits) vests. And that is exactly what the legislature did here," attorney Stephen M. Pincus said in the release.
The attorneys said some retirees will lose more than $165,000 over the next two decades because the legislation reduces the annual cost-of-living raise from 3.5 percent to 2 percent annually, with no increase this year.
Senate Minority Leader Josh Penry, R-Grand Junction, who co-sponsored the legislation, said the bill was aimed at taking care of PERA's $30 billion in unfunded liabilities.
"Our reform bill represents the first time a state has cut the benefits of current retirees, so litigation was always expected," he said.
"But to the plaintiffs, who I assume are well-meaning folks, I would say this: If we don't reduce these automatic pension increases, the entire fund is poised to go bankrupt. Think United. Think GM. That didn't work out well for the company or the retirees. These reforms are tough, but they're necessary."
PERA covers 434,056 state workers, teachers, local-government workers and employees of the courts who don't receive Social Security benefits. They pay a certain percentage toward their retirement, as do their employers, the taxpayers.
The cost-of-living provision of the legislation went into effect when the bill was signed. The rest of the bill, including provisions that change the amount of contributions and retirement ages, are effective Jan. 1.
Lynn Bartels: 303-954-5327 or lbartels@denverpost.com
posted by Kathie Bracy at 1:03 PM
<< Home