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Was it constitutional for Proposition 124 to replace PSPRS' permanent benefit increases with a capped 2% COLA?

In this blog I and multiple commenters have broached the subject of the suspect constitutionality of PSPRS' replacement of the old perma...

Wednesday, June 5, 2013

The public pension COLA wars reach the Arizona Supreme Court

The first case challenging SB 1609's public pension reforms has reached the Arizona Supreme Court.  This Arizona Republic article, State’s high court weighing judge-pension case, by Beth Duckett covers the arguments by the plaintiffs, retired judges seeking to overturn the change in how retirees' cost of living allowances (COLA) are determined, and the Elected Officials Retirement Plan (EORP).  The state of Arizona became involved in the case, and an Assistant Attorney General is arguing the case on behalf of EORP.

The issues of this case have been covered in several prior posts, including this one, which updated all the case currently pending against PSPRS and EORP.  For retirees, at least, my (strictly amateur) reading of the vesting laws and the Arizona Constitution seems to make it clear that their benefits, including COLA's, can not be changed after they retire, and this is how the lower courts have already ruled.  The only winning argument I can see for the state would be that the reforms are absolutely necessary to avoid EORP's default.

The outcome of this case will immediately resolve the Rappleyea case since they involve the exact same COLA issue.  The only difference is the parties: Rappleyea involves retired law enforcement officers versus PSPRS.  The Hall vs. EORP and Parker vs. PSPRS cases involve active employees and still await their day in the high court.  The article states a decision is expected by the end of summer.  If the state loses this case, the article says that some legislators may propose to amend the state Constitution in order to lessen some public pension guarantees.  Any amendment would have to be approved by the state's voters.  I do not know the odds of approval, but the election would undoubtedly cost a lot of money and bring national attention to another Arizona legal fight.

Stay tuned.

1 comment:

  1. I have frequently commented on similar issues in Illinois. Your constitution has the same language - it defines pensions as a contractual relationship that cannot be diminished or impaired. Even if you change your constitution to remove this language, you cannot retroactively take away earned pension benefits from employees and retirees because of the following provision in the U.S. Constitution: Article 1, Section 10, "No State shall ... pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts...."

    Contracts need to be honored. Period. End of Story. That Republicans, primarily, argue otherwise (at least when the contracts don't benefit the top 1%) shows how far away from true conservatism the party has travelled.


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