HEADLINES : Colorado, Minnesota
Pension Rulings May Boost Cutback Efforts
In a pair of rulings that may bolster efforts to roll back public pensions nationwide, judges in Minnesota and Colorado have thrown out lawsuits challenging recent cuts to certain retiree benefits.
The judges said in separate decisions late Wednesday that the Minnesota and Colorado legislatures had the right to reduce cost-of-living adjustments for retirees, saying the benefits weren't contractually protected.
Several states, including New Jersey in a move this week, have cut back on cost-of-living adjustments for retirees in an effort to shore up the finances of public-employee retirement systems. Cost-of-living adjustments are annual increases to retirement benefits that are essentially designed to keep pace with inflation.
The cases in Minnesota and Colorado have been closely watched by lawmakers across the country as they contemplate similar changes in their own states. Unlike changes to benefits for new workers, which can take decades to deliver savings to state and local governments, rolling back cost-of-living adjustments can yield immediate savings.
While each state has different legal protections for public-worker pension benefits, the rulings "will really have an impact on what other state legislatures choose to do,'' said Amy Monahan, a professor at the University of Minnesota law school who has studied legal issues of public pensions. "Even if the rulings are not direct precedent, legislatures will now say, 'We might as well try it.' "
Stephen Pincus, a Pittsburgh attorney representing the retirees who filed the lawsuits, said his clients were "contemplating filing an appeal."
In the Colorado ruling, District Court Judge Robert Hyatt said for decades the state has changed the way it calculates cost-of-living adjustments. "Decades of history and legislative language do not support Plaintiff's position that they are contractually and constitutionally entitled in perpetuity to the cost of living adjustment in effect at the time of their respective retirements,'' the ruling says.

