STUMP » Articles » Public Pensions Watch: Lawsuits lawsuits everywhere... » 24 February 2015, 01:11

Where Stu & MP spout off about everything.

Public Pensions Watch: Lawsuits lawsuits everywhere...  


24 February 2015, 01:11

I mentioned back in January that there’s a few lawsuits out there against pension reform in Illinois, and now we’ve got a date:

SPRINGFIELD, Ill. • The Illinois Supreme Court has announced it will hear oral arguments in the state’s landmark pension-overhaul case on March 11.

Arguments will begin at 2:30 p.m. in the high court chamber in downtown Springfield.

The Illinois General Assembly and former Gov. Pat Quinn adopted a plan in late 2013 designed to cut into the $111 billion deficit in four state pension programs built by years of underfunding.

Illinois is not the only place with pension-reform-related lawsuits. Rhode Island had put through some reforms in 2011 and litigation surrounding it is still going on.

Lots of issues are not settled even within the approach:

NEWPORT – The Superior Court judge overseeing the state public pension case heard opposing arguments Friday on whether the half dozen groups challenging the legality of cuts in their retirement benefits should present their arguments in separate trials.

Lawyer John Tarantino, representing the state, told Judge Sarah Taft-Carter that the issue in all the cases is the same: did Rhode Island have the constitutional right to cut cost-of-living raises, raise retirement ages and take other cost-saving measures. Therefore, he said, the issue should be heard in one consolidated trial.

But lawyers representing various retiree groups and active public sector employees said the ramifications of the benefit cut reductions were diverse. One overarching trial, they said, would unfairly dilute the financial impacts the pension changes caused and make it difficult to present uniques cases.

I am not a lawyer, but if the issue is whether any kind of change is constitutional — whether it’s COLAs, retirement age, or even cutting what current retirees are being paid — it seems like it should be handled together.

In many states, even minor adjustments to pensions have been ruled as unconstitutional, so why waste time?

Carly Beauvais Iafrate, representing about 7,000 members of the Rhode Island Public Employees’ Retiree Coalition, said retirees were “supposed to be an untouchable group” prior to the 2011 pension overhaul law.

She said she would want to argue at a separate trial that retirees had a “unique status” and “what the state is trying to do is dilute that status” by asking for one trial, with all public sector workers lumped together..

Yeah, one finds out that a group is not “untouchable” once the money runs out. Funny that.

Anyway, I find the lawsuits to be sideshows.

Yes, it’s important to go through process, but the situation in Rhode Island and Illinois is that they do not have enough money to fulfill all the promises they’ve made in the past.

Yes, fine, try to hit current taxpayers and bondholders before hitting current retirees, but that doesn’t mean they will never get touched.

As per Carl Richards and the Behavior Gap, paying the promises is simple, but not easy. They needed to have put in a lot into the pensions for decades, and not create too-rich promises that they couldn’t keep.

They didn’t do that.

And that choice has current consequences.

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