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