Tuesday, May 5, 2015

Oregon Pension Fix Struck Down by Oregon Supreme Court by Amey Stone

“…In 2013, the state implemented reductions to cost-of-living-adjustments that would have reduced pension liabilities by $5 billion. Savings from those reductions had already been incorporated into Oregon’s budget to the tune of $131 million.

“But those reductions were contested in court and on April 30, the Oregon Supreme Court disallowed applying the COLA reductions retroactively for current and retired workers. That means those costs are going back on the books.

“The court ruled that because current and retired employees had already done the work the benefits were associated with, those benefits were contractually protected and could not be reduced. The court rejected the state’s argument that it should be allowed to change the benefits to serve a public purpose…”

Published in Barron's. 


Note: The legal basis for protection of public pension rights in Oregon (for both past and future) is through contract.  Accruals are not protected by state constitution in Oregon. 

It's not the first time you have heard me say this:

The Illinois General Assembly does not possess "reserved sovereign powers" to diminish a constitutionally-protected pension. The state's chronic underfunding of its public pension systems for decades cannot warrant the impairment or diminishment of public employees' pension benefits and rights. It is quite difficult to comprehend that Illinois legislators can choose which contracts to honor and which ones to violate now and in the future. 

1 comment:

  1. Just heard that the City of Los Angeles is suing Wells Fargo Bank (for mortgage fraud, I believe). GOOD!
    American cities, feel free to follow L.A.'s lead!