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Texas (Houston) – Limited Employer Contributions, Increased Employee Contributions, Deferred Retirement

Posted by StuartBuck in - -View All States - - on June 5, 2017 with Comments Off on Texas (Houston) – Limited Employer Contributions, Increased Employee Contributions, Deferred Retirement

Law:

SB 2190 (enacted May 31, 2017)

Type of reform:

SB 2190 generally revised the manner in which the Houston Police, Firefighter, and Municipal Employees Retirement Funds calculate the required city contribution. Under the statute, each of the funds must provide a report and analysis on the median, minimum, and maximum contribution rate for the municipality for 31 years beginning on July 1, 2017, and set municipal contribution rates accordingly. Each fund has the authority to raise funds through voter-approved bond issuances.

The law also modifies the DROP program by restricting eligibility, limiting the number of years that individuals can participate in DROP to 13, and restricting certain member contributions from being added to DROP.

With respect to the Firefighter Board in particular, SB 2190 allows the fund and the municipality to alter the means of determining contribution rates, but prohibited increasing the assumed rate of return to more than 7% a year. It also prohibited extending the amortization period of liability to greater than 30 years and changed the rate of contribution for active members’ salary from 8.35 % to 10.5%.

Case:

Houston Firefighters Relief and Retirement Fund v. City of Houston, Harris County District Court (filed May 30, 2017) [Case No. 2017-36216, 190th Judicial District] Read more…

California (Alameda) — Reduced Benefits

Posted by StuartBuck in - -View All States - - on January 11, 2017 with Comments Off on California (Alameda) — Reduced Benefits

Law: AB 340 and trailer AB 197 enacting California Public Employees’ Pension Reform Act (PEPRA) of 2013

Type of reform:

Among other things, PEPRA eliminated the option—previously available to public employees under Government Code 20909—to purchase at cost up to five years of non-qualifying service credit, or “airtime”.  Airtime allowed the purchasers to increase their pension benefits upon retirement by increasing their years of service.  Read more…

Kentucky – Reduced COLAs

Posted by StuartBuck in Kentucky on November 12, 2016 with Comments Off on Kentucky – Reduced COLAs

Law: HB 636/ KRS 67A.690(1) (March 2013)

Type of reform:  The reform amended the Policemen’s and Firefighter’s Retirement Fund (the “Fund”).  The Fund provides service retirement annuities and includes a COLA. The act governing the Fund is the Police and Firefighter’s Retirement and Benefit Fund Act, KRS 67A.360-67A.690 (the “Act”).  The Act was amended in 1980 to increase members’ contribution rate and the rate of the COLA. Under the 1980 version of the Act, members received annuities with a 2 to 5 percent COLA per year.

On March 14, 2013, the Kentucky General Assembly amended the Act to reduce the annual COLA.  Under the 2013 amendments, the 2 to 5 percent COLA would be provided to Fund members who participated in the Fund prior to the 2013 amendments, when the Fund’s actuarial levels exceeded 85 percent. Fund members who joined the Fund after the effective date of the 2013 amendment would receive a maximum 3 percent COLA.

When the Fund actuarial levels fail to reach 85 percent, the Fund members receive a COLA tiered to the annual pension income in rates ranging from 2 percent (for those making less than $40,000) to zero (for those with pension annuities greater than $100,000) until Jan. 1, 2016, when the prior COLAs were scheduled to be reinstated.

Case: Puckett v. Lexington-Fayette Urban Cnty. Gov’t, Case No. 13-cv-00295, Eastern District of Kentucky (filed Sept. 11, 2013)

The plaintiffs were members of the Fund and retired in 2009 and 2010. They sued, arguing that the new version of the Act unlawfully deprived them of a vested right to their COLAs in violation of the Contract Clause, the Takings Clause, and the Due Process Clause of the United States Constitution and the analogous provisions of the Kentucky Constitution. They also alleged that the amendment violated section 55 of the Kentucky Constitution. The defendants moved to dismiss.

On Sept. 28, 2015, Chief District Judge Karen Caldwell granted the defendants’ motions to dismiss. [Puckett v. Lexington-Fayette Urban Cnty. Gov’t, 60 F.Supp. 3d 772, 722 (E.D. Ky 2014)]  Judge Caldwell determined that the plaintiffs did not have a constitutional right to the COLA because it was neither a protected contract nor a property right. The plaintiffs could not identify an express contractual right in the Act, nor an implied contractual right evidenced by congressional intent. With respect to the plaintiffs’ Takings claim, the court found that the plaintiffs had failed to state a claim under the Due Process Clause of the Fourteenth Amendment because the state legislature always retained the authority to modify the COLA.

Appeal:

The plaintiffs appealed to the Sixth Circuit Court of Appeals, Case No. 15-6097. On April 21, 2016, the Court (Judges Eric Clay, Martha Daughtrey, and Jane Stranch) heard oral argument.

On August 15, the court issued a decision (authored by Judge Clay) affirming the district court.

The Sixth Circuit held that, as a threshold matter, it was without jurisdiction to decide the claims against the Commonwealth of Kentucky because those claims were barred by the doctrine of sovereign immunity. Sovereign immunity did not bar the claims against the individual officers, however, because “the complaint alleges an ongoing violation of federal law and seeks prospective relief.” (Opinion, p. 5)

The court noted that the question presented before it—whether the reduction of future COLA increases is an unconstitutional violation of contracts, impairment of due process, or unconstitutional taking—is one of first impression in the Sixth Circuit.

Beginning with the allegation that the reduction of the COLA was a violation of the provision in the U.S. Constitution that provides that no state shall pass a “Law impairing the obligation of contracts,” (U.S. Const. art. I, § 10, cl. 1)  the court found for the defendants. The court found that there was no contractual relationship because the plaintiffs failed to “plead facts demonstrating the existence of a contractual relationship establishing a vested contract right.”  (Opinion, p. 7) Looking at both the language of the Act and the intent of the legislature when it approved the Act, the court found no evidence that the legislature was to be bound to the COLA increase.  The court rejected the plaintiffs’ arguments that they were entitled to a specific COLA formula, or that the COLA was part of their annuity payments, and was therefore protected as an annuity. The court found insufficient evidence to support the plaintiffs’ position. Further, the court referenced recent decisions in other jurisdictions that also found that COLAs are not protected by contract.

Almost every court to have considered the issue has rejected claims that statutory pension schemes and provisions about COLAs created contract rights subject to the constraints of the Contract Clause.  See, e.g., Me. Ass’n of Retirees, 758 F.3d at 31 (finding that the statutory language was at best ambiguous, and therefore the retirees could not meet their burden to show that the legislature unmistakably intended to create contractual rights to COLAs according to the formula in effect at the time they retired); Am. Fed’n of Teachers-N.H. v. State of N.H., 111 A.3d 63, 72 (N.H. 2015) (pension plan members did not have vested rights to a COLA where the court was “not persuaded that the statutory language established a contractual obligation to provide a COLA.”); Justus v. State, 336 P.3d 202, 211-12 (Colo. 2014) (statute does not contain “contractual or durational language stating or suggesting a clear legislative intent to bind itself, in perpetuity, to paying . . . a specific COLA formula”); Bartlett v. Cameron, 316 P.3d 889, 895 (N.M. 2013) (finding that several amendments to the statute’s COLA provision showed the legislature’s intent to promote public policy, and not a clear and unambiguous intent to protect a vested contract right to paying a specific COLA).

(Opinion, pp. 11-12)  The State of Arizona was an exception, the court noted, because the Arizona Supreme Court had concluded that under its state constitution’s Pension Clause, the retirees were entitled a specific formula for their benefit calculation, which formula included the COLA. (Opinion, p. 12 citing Hon. Fields v. Elected Officials’ Ret. Plan, 320 P.3d 1160, 1163-66 (Ariz. 2014) The Pension Clause ‘‘confers additional, independent protection for public retirement benefits separate and distinct from the protection afforded by the Contract Clause.’” (Opinion, p. 12 (citing Hon. Fields. at 1164-65 (emphasis added)). The Kentucky Constitution had no similar clause, and the legislative intent surrounding the enactment of the COLA in Kentucky indicated it was not part of the pension, but rather an adjustment to it. For these reasons, the court concluded that the plaintiffs had failed to plead facts sufficient to survive the motion to dismiss.

The court also rejected the plaintiffs’ Due Process and Takings Clause claims. With respect to the Due Process claims, the court found that the plaintiffs had failed to show the requisite level of intent on the part of the legislature to be bound by the COLA and, furthermore, had failed to show that there was no rational basis for the modification to the COLA.  With respect to the Takings Clause claim, the court found that because the plaintiffs had failed to show that they were entitled to the COLA by contract, they had no constitutionally protected property interest in the COLA. Thus, the deprivation of their COLA was not “the taking of private property … for public use without just compensation.” (U.S. Const. Amend. V)

Relevant documents:

Pennsylvania (Scranton) – Reduced COLAs

Posted by StuartBuck in - -View All States - - on September 21, 2015 with Comments Off on Pennsylvania (Scranton) – Reduced COLAs

Law: 53 P.S. § 30495(d) (Retirement increases or cost of living increases shall not be made unless the pension fund is actuarially sound and is able to maintain the increase and allowance to retired members.)

Type of reform: In December 2014, after receiving information that the pension fund was unsound, the city of Scranton (via the city solicitor and solicitor for city council) directed that the pension fund administrator and fund manager cease and desist from processing raises planned for January 2015. Read more…

Kentucky — Increased Employee Contributions, Decreased Benefits

Posted by StuartBuck in - -View All States - - on August 31, 2015 with Comments Off on Kentucky — Increased Employee Contributions, Decreased Benefits

AG Motion to Dismiss Appeal (Nov. 7, 2016)Law: HB 540 (April 2010) (became KRS 161.540(1)(c))

Type of reform: For current teachers and retirees under the age of 65, the bill imposed a graduated increase in employee contributions to retiree health insurance—from .75 percent to 3.75 percent over the course of five years.  This contribution for health care is in addition to employees’ existing contributions to the retirement system, which range from 8 to 10 percent depending on date of hire.

Case:  Wieck v. Kentucky Teachers’ Retirement System (KTRS), No. 3:15-cv-692 (DJH), W.D. Kentucky (filed August 24, 2015)

Read more…

Texas (Fort Worth) (2014 Ordinance) – Reduced COLAs, Changed Final Salary Calculation, Eliminated Spiking

Posted by StuartBuck in - -View All States - - on March 13, 2015 with Comments Off on Texas (Fort Worth) (2014 Ordinance) – Reduced COLAs, Changed Final Salary Calculation, Eliminated Spiking

Law: Ordinance 21510-10-2014 (October 2014)

Type of Reform:

The ordinance reduces the multiplier used to calculate pension benefits for firefighters by one-half percent (from 3 percent to 2.5 percent); determines retirement pay by using the highest five years instead of the highest three years; and eliminates overtime from pension calculations.

Read more…

New Jersey – State Contribution (Challenge to 2016 Budget)

Posted by StuartBuck in - -View All States - - on March 10, 2015 with Comments Off on New Jersey – State Contribution (Challenge to 2016 Budget)

Law:

P.L. 1997 – c.113, NJSA 43:3c- 9.5 (2011)

Type of reform:

The law required the state to make certain annual contributions to the pension fund for distribution to retirees. Read more…

California (San Diego)—Increased Employee Contribution, Changed Final Salary Calculation

Posted by StuartBuck in - -View All States - - on February 3, 2015 with Comments Off on California (San Diego)—Increased Employee Contribution, Changed Final Salary Calculation

Law:

California Public Employees’ Pension Reform Act of 2013 (PEPRA) (January 2013)

Type of reform:

The legislation reduced employer contributions, increased employee contributions, and reduced benefits from 3 percent of pensionable compensation to be paid at age 55 to 2.7 percent of pensionable compensation to be paid at age 57. Read more…

California—Increased Employee Contribution, Changed Final Salary Calculation, Eliminated Spiking

Posted by StuartBuck in - -View All States - - on January 6, 2015 with Comments Off on California—Increased Employee Contribution, Changed Final Salary Calculation, Eliminated Spiking

Law:

AB 340 and trailer AB 197 enacting California Public Employees’ Pension Reform Act (PEPRA) (enacted September 2012, effective January 1, 2013).

Type of reform:

The legislation reduced employer contributions, increased employee contributions, and restricted final pay to wages, excluding in-kind payments, unused accrued vacation, and overtime.

Read more…

Wisconsin (Milwaukee County) — Reduced Benefits

Posted by StuartBuck in - -View All States - - on December 24, 2014 with Comments Off on Wisconsin (Milwaukee County) — Reduced Benefits

Law:

Milwaukee County General Ordinance 201.24 (5.1) (2)(4) 2011 (July 2011)

Type of reform:

The ordinance reduced the multiplier for pension benefits from 2 percent to 1.6 percent.

Read more…

South Carolina — Double Dipping

Posted by StuartBuck in - -View All States - - on December 9, 2014 with Comments Off on South Carolina — Double Dipping

Law:

South Carolina State Retirement System Preservation and Investment Reform Act of 2005 (2005 S.C. Acts 1697 also Act 153) (effective July 2005)

Type of reform:

The law outlaws the practice of allowing retirees to return to work and continue to receive existing pension benefits without further contributing to the pension system.  The reform requires employees who retired and then returned to work to make the same contributions to the state pension plans as pre-retirement employees but without receiving further pension benefits.

Case:

Hutto v. South Carolina Retirement System, No. 4:10-CV-02018-JMC (D. S.C. filed Aug. 3, 2010)

Status of litigation:

The plaintiffs were state employees who retired after July 1, 2005. They filed a class action lawsuit in 2010 alleging that the 2005 legislation violated the takings and due process clauses of the U.S. Constitution. They sought repayment of contributions withheld since July 1, 2005, and an injunction preventing further collections of contributions.

On Sept. 27, 2012, the South Carolina District Court judge granted the defendants’ motion to dismiss on the grounds of sovereign immunity.

The plaintiffs appealed to the 4th Circuit of the United States Court of Appeals in Case No. 13-1523. On Dec. 5, 2014, the 4th Circuit affirmed the lower court’s decision, finding that the pension plans and the trust holding the pension plans’ assets are arms of the state government and, therefore, entitled to sovereign immunity. Additionally, the state officials who were sued in their official capacity have sovereign immunity with respect to both the claim for damages and for injunctive relief.

Relevant Documents:

Nebraska (Omaha) — Employee Contribution Rates

Posted by StuartBuck in - -View All States - - on December 9, 2014 with Comments Off on Nebraska (Omaha) — Employee Contribution Rates

Legal action:

In union contract negotiations, the City of Omaha requested that employees contribute an additional 1 percent to the pension system.

Type of reform:

The measure would raise employee contribution rates.

Case:

Omaha Police Union Local 101 v. City of Omaha, No. CI 14-5136 (District Court, Douglas County) (filed June 25, 2014)

Status of litigation:

The plaintiffs seek a declaratory judgment binding the City of Omaha under the parties’ pension contract and invalidating the city’s attempt to unilaterally modify the contribution rate. The plaintiffs allege that the parties’ pension benefit contract provides that if the city and the union have not agreed to changes or to a new contract by April 1 of the calendar year, the existing contract will automatically renew through the end of the year. The union argues that the city attempted to implement modifications for the current year, thereby violating the contract.

On Dec. 1, 2014, following a two-day trial, District Judge Joseph Troia found that the city failed to provide requisite notice that it intended to modify the contract by April 1. Accordingly, the contribution rate increase that was planned for 2014 cannot be implemented.

Relevant documents:

Oklahoma — Plan Conversion

Posted by StuartBuck in - -View All States - - on November 10, 2014 with No Comments

Law: 

H.B. 2630 (May 2014)

Type of reform: 

The law states that employees hired after Nov. 1, 2014, will participate in a new defined contribution plan rather than the old defined benefit plan.

Read more…

Oregon — Reduced COLAs, Reduced Benefits

Posted by StuartBuck in All on October 27, 2014 with No Comments

Law:

SB 822  (May 2013) (summary; text), and SB 861 (Oct. 2013) (summary; text).

Type of reform:

SB 822 eliminated income tax offset benefits for nonresidents retirees and modified the COLA under the Public Employees’ Retirement System (PERS).  SB 861 further modified the COLA and added administrative authority to provide one-time supplement payments to retirees.
Read more…

California (Ventura County) — Plan Conversion

Posted by StuartBuck in - -View All States - - on August 25, 2014 with No Comments

Ballot Initiative:

Sustainable Retirement System Initiative (proposed for November 2014 ballot)

Type of reform:

The initiative would change the pension system for new hires and new employees from a defined benefit plan to a 401(k)-style defined contribution plan. It would also limit pension-based salary increases for five years. Read more…

Arizona (Phoenix) — Eliminated Spiking

Posted by Leila Walsh in - -View All States - - on July 18, 2014 with No Comments

Law:

Phoenix City Council Pension Fairness and Spiking Elimination Subcommittee Recommendations  (July 2014)

Type of reform:

The adopted recommendations eliminated the inclusion of unused vacation and leave time in the calculation of pension benefits. Read more…

New Jersey — State Contribution (Challenge to 2015 Budget)

Posted by Leila Walsh in - -View All States - - on June 19, 2014 with No Comments

Law: L. 2011, c. 78, amending section 5 of P.L. 1997, c.113, NJSA 43:3c- 9.5 (2011)

Type of reform:

The law required the state to make certain annual contributions to the pension fund for distribution to retirees.  Read more…

Alabama — Increased Employee Contribution

Posted by Leila Walsh in - -View All States - - on May 23, 2014 with No Comments

Law:

HB 414 (June 2011)

Type of reform:

The bill increased contributions for state judges from 6 percent to 8.5 percent. Read more…

Arizona — Increased Employee Contribution

Posted by Leila Walsh in - -View All States - - on May 22, 2014 with No Comments

Law:

SB 1614 (April 2011)

Type of reform: 

The bill increased the employee contribution to the pension plan.

Case:  

Barnes v. Arizona State Retirement System, No. CV-2011-011638 (Superior Court of Arizona, Maricopa County, Judge Eileen S. Willett) (filed July 13, 2011) Read more…

Arizona — Increased Employee Contribution, Reduced COLAs

Posted by Leila Walsh in - -View All States - - on May 22, 2014 with No Comments

Law:

SB 1609 (April 2011)

Type of reform:

The bill increased employee contribution rates from 7 percent to 10 percent and altered the formula for calculating the cost-of-living adjustments (COLAs) to reduce the previous 4 percent annual increase.
Read more…

California — Increased Employee Contribution, Changed Final Salary Calculation, Eliminated Spiking

Posted by Leila Walsh in - -View All States - - on May 22, 2014 with No Comments

Law:

AB 340 and trailer AB 197 enacting California Public Employees’ Pension Reform Act of 2013 (PEPRA) (January 2013)

Type of reform: 

PEPRA amended Government Code section 31461, a provision of the County Employees Retirement Law to fundamentally change the manner in which public pensions are calculated. PEPRA reduced employer contributions, increased employee contributions, and restricted final pay to wages—excluding in-kind payments, accrued unused vacation, and overtime. Specifically, the legislation prohibited the use of standby pay, administrative response pay, callback pay, cash payments for waiving health insurance, vacation, and other pay items from the calculation of members’ final compensation for the purposes of calculating pensions.
Read more…

California (San Diego) — Changed Final Salary Calculation, Increased Employee Contribution, Plan Conversion

Posted by Leila Walsh in - -View All States - - on May 22, 2014 with No Comments

Ballot initiative:

Proposition B (June 2012)

Type of reform:

The law froze pay levels used to determine final average pay, required a defined contribution plan for most new employees, and required substantially equal contributions from employees and employers. Read more…

California (San Jose) — Increased Employee Contribution, Benefits Reduction, and COLA Suspension

Posted by Leila Walsh in - -View All States - - on May 21, 2014 with No Comments

Ballot initiatives:

Resolution No. 76087 (December 6, 2011)

Resolution No. 76158  (March 2012)

Type of reform: 

The resolutions allowed pension reform, increased employee contributions, established pension cost and benefit reductions for new employees, and suspended cost-of-living adjustments (COLAs). Read more…

California (San Jose) — Increased Employee Contribution, Reduced COLAs, Plan Conversion

Posted by Leila Walsh in - -View All States - - on May 20, 2014 with No Comments

Ballot initiative:

Measure B  (June 2012)

Type of reform:

The law raised employee contribution rates to pay for unfunded liabilities, lowered cost-of-living adjustments (COLAs) for retirees, changed the definition of “disability pension,” and created a “voluntary election program” that allows employees to opt-in to a lower level of benefits for a lower contribution rate. Read more…

California (Pacific Grove) — Limited Employer Contributions

Posted by Leila Walsh in - -View All States - - on May 19, 2014 with No Comments

Ballot initiative:

Measure R (November 2010)

Type of reform: 

The measure placed a limit of 10 percent on employer contributions and provided that employees have no vested right to retirement benefits. Read more…

California (Pacific Grove) — Reduced Benefits

Posted by Leila Walsh in - -View All States - - on May 17, 2014 with No Comments

Law:

A voter initiative filed in 2012 sought to eliminate a police pension increase made by Ordinance 02-18 (2002).

Type of reform:

Ordinance 02-18 was a 3 percent at 50 plan, which allowed employees to retire at age 50 and receive an annual pension benefit equal to 3 percent times the number of years worked, times final salary. The salary paid to the employee after retirement was determined by the retirees’ years of employment and increased 3 percent for every year of service. The initiative alleged that the ordinance had been illegally enacted because it was premised upon faulty information and without appropriate disclosure and cost analysis. Read more…

Colorado — Reduced COLAs

Posted by Leila Walsh in - -View All States - - on May 16, 2014 with No Comments

Law:

SB 10-001  (February 2010)

Type of reform:

The law reduced cost-of-living adjustments (COLAs) for current retirees. Read more…

Florida — Increased Employee Contribution, Suspended COLAs

Posted by Leila Walsh in - -View All States - - on May 15, 2014 with No Comments

Law:

SB 2100 (May 2011)

Type of reform:

The bill increased the contribution for employees by 3 percent and suspended cost-of-living adjustments (COLAs).

Case: 

Williams v. Scott, No. 2011-CA-1584, Circuit Court of the 2nd Judicial Circuit, Leon County, Judge Jackie L. Fulford (filed June 20, 2011) Read more…

Florida (Miami) — Reduced Benefits

Posted by Leila Walsh in - -View All States - - on May 13, 2014 with No Comments

Law:

Ordinance 10-10901 (August 2010)

Type of reform:

The ordinance reduced pension benefits and salaries.  Read more…

Florida (Miami Beach) — Increased Retirement Age, Reduced Benefits

Posted by Leila Walsh in - -View All States - - on May 13, 2014 with No Comments

Laws:  

Florida Statute 166.021(4) requiring a voter referendum to make charter changes affecting employee rights and Florida Statute 447.309(3) allowing modification upon agreement by the city’s electors

Type of reform:

The statutes lowered future accruals and raised the retirement age. Read more…

Georgia (Atlanta) — Increased Employee Contribution, Plan Conversion, Increased Retirement Age

Posted by Leila Walsh in - -View All States - - on May 11, 2014 with No Comments

Law:

2011 amendment (Ordinance 11-0-0672) to the defined benefit pension plan (June 2011)

Type of reform: The amendment requires active employees to contribute an extra 5 percent of their compensation to keep their existing benefits with no other changes. Read more…

Idaho — Repealed Early Retirement Incentive

Posted by Leila Walsh in - -View All States - - on May 9, 2014 with No Comments

Law:

SB 1108 (March 2011)

Type of reform:  

The bill repealed the early retirement incentive for teachers and provided that all collective bargaining agreements would expire on June 30, 2011. Read more…

Illinois — Changed Final Salary Calculation

Posted by Leila Walsh in - -View All States - - on May 9, 2014 with No Comments

Law:

HB 3813  Public Act 97-0651 (January 2012)

Type of reform

The bill limited state employees’ ability to take a leave of absence to work for a labor union in order to receive a higher pension based on their union salaries rather than their previous public employment salaries. Read more…

Illinois — Reduced COLAs

Posted by Leila Walsh in - -View All States - - on May 7, 2014 with No Comments

Law:

Public Act 98-0599 (December 2013)

Type of reform: 

The legislation ties payments of cost-of-living adjustments (COLAs) to actual inflation, creates pauses of up to five years as to when those COLAs are funded, and raises the retirement age for workers age 45 and under. Read more…

Louisiana — Plan Conversion

Posted by Leila Walsh in - -View All States - - on May 5, 2014 with No Comments

Law: 

HB 61 (June 2012)

Type of reform: 

The bill established a cash balance plan for the Louisiana State Employees’ Retirement System, the Teachers’ Retirement System of Louisiana, and the Louisiana School Employees’ Retirement System. It also required 8 percent of an individual’s salary be contributed to the cash balance plan and for the member’s account to be credited with 12 percent of the member’s monthly pay, including all employee contributions.

Case:

Retired State Employees Association v. State of Louisiana, No. 614675 (19th Judicial District Court in Baton Rouge, Judge William Morvant) (filed Aug. 16, 2012)  Read more…

Massachusetts — Changed Final Salary Calculation

Posted by Leila Walsh in - -View All States - - on May 5, 2014 with No Comments

Law:

SB 2079 (June 2009)

Type of reform:  

The bill redefined compensation and wages to include only those wages actually earned by the employee and established that, in the event of pension benefits granted for an injury, the compensation used to calculate such benefits should be based on the average annual rate of the individual’s regular compensation during the 12 months prior to the sustained injury. Read more…

Maryland (Baltimore) — Reduced COLAs

Posted by Leila Walsh in - -View All States - - on May 2, 2014 with No Comments

Law: 

Ordinance 100-306 (June 2010) (available through Baltimore archives)

Type of reform: 

The ordinance reduced annual cost-of-living adjustments (COLAs). Read more…

Maine — Reduced COLAs

Posted by Leila Walsh in - -View All States - - on May 2, 2014 with No Comments

Law:

LD 1043  (June 2011)

Type of reform:

The law reduced annual cost-of-living adjustments (COLAs). Read more…

Michigan — Increased Employee Contribution, Plan Conversion, Changed Final Salary Calculation

Posted by Leila Walsh in - -View All States - - on May 2, 2014 with No Comments

Law:

HB 4701, Public Act 264 (December 2011)

Type of reform:  

The bill offered employees the option of raising their contribution for the defined benefit plan or converting to a defined contribution plan; moved new or non-vested employees to a defined contribution plan; replaced retiree health insurance for new employees with a 401(k)-style plan; and excluded overtime pay in calculating benefits. Read more…

Michigan — Income Tax Exemption

Posted by Leila Walsh in - -View All States - - on May 2, 2014 with No Comments

Law:

HB 4361, Public Act 38 (May 2011)

Type of reform:  

Previously, all public pension distributions were deductible from Michigan state income tax. The bill phases out the personal income tax exemption for retirement income (i.e., pension distributions) based on birthdate and income level. Read more…

Michigan — Increased Employee Contribution, Plan Conversion

Posted by Leila Walsh in - -View All States - - on May 1, 2014 with No Comments

Law: 

SB 1040 / Public Act 300 (September 2012)

Type of reform:  

The legislation in part responded to a 2010 statute that required public school employees to contribute 3% of their salaries for a retirement healthcare plan.  2012 Public Act 300 enabled current public school employees to opt out of the retiree healthcare plan and avoid paying the requisite 3% contribution for the healthcare plan, and permitted those employees who did not qualify for the healthcare to have a separate retirement allowance.  Additionally, the legislation changed the Michigan pension benefit plans by requiring public school employees to choose from among the following: an increase in their employee contribution, a lesser pension, or a freeze of their defined benefit pension and a switch to a defined contribution plan for future accruals.

Read more…

Michigan (Wayne County) — Mismanagement

Posted by Leila Walsh in - -View All States - - on April 29, 2014 with No Comments

Case:

Bobby Hawkins et. al v. Moner, No. 14-004912 (NZ) (Circuit Court for the County of Wayne) (filed April 15, 2014) Read more…

Minnesota — Reduced COLAs

Posted by Leila Walsh in - -View All States - - on April 29, 2014 with No Comments

Law:

2009 Minnesota Ch. 162 SF 191  (May  2009) and 2010 Minnesota Ch. 359 SF 2918 (May 2010)

Type of reform:

The legislation reduced cost-of-living adjustments (COLAs) and increased the vesting requirement from three to five years.   Read more…

Missouri (St. Louis) — Increased Employee Contribution, Plan Conversion

Posted by Leila Walsh in - -View All States - - on April 28, 2014 with No Comments

Law:

Ordinances No. 69149/ Board Bill 270 (May 2012),  No. 69183/ Board Bill 11 (July 2012), and No. 69245/ Board Bill 12 (July 2012)

Type of reform:

The bills discontinued the accrual of new benefits under a former pension plan (Firemen’s Retirement System (FRS)), and created a new plan (Firefighters’ Retirement Plan (FRP)) for accruals after Feb. 1, 2013.  The new plan increased contribution rates and reduced retirement payments for retirees under the age of 55. Read more…

Montana — Reduced COLAs, Increased Employee Contribution

Posted by Leila Walsh in - -View All States - - on April 24, 2014 with No Comments

Laws:

HB 377 (May 2013) and HB 454 (May 2013)

Type of reform:

HB 377 provides the Teachers Retirement System with an option to reduce the COLA from 1.5 percent to .5 percent beginning Jan. 1, 2014, if the pension fund is less than 90 percent funded, and the option to increase the COLA from .5 percent to 1.5 percent if the pension fund is at least 90 percent funded and if increasing the COLA would not reduce the funding to less than 85 percent.

HB 454 provides the Public Employees Retirement System an option to reduce the COLA from 3 percent to 1.5 percent or potentially lower, and increases contributions from employees. Read more…

New Hampshire — Increased Employee Contribution, Increased Retirement Age, Changed Final Salary Calculation, Reduced Benefits

Posted by Leila Walsh in - -View All States - - on April 24, 2014 with No Comments

Law:

HB 2 (2011)

Type of reform:

HB 2 increased the employee contribution; limited earnable compensation by excluding vacation and sick pay; increased the final average salary calculation period to five years, lowering the maximum benefit;  increased the age requirement; reduced the multiplier from 2.5 percent to 2.1 percent; and repealed an accidental disability exception. Read more…

New Hampshire — Reduced Benefits

Posted by Leila Walsh in - -View All States - - on April 23, 2014 with No Comments

Law:

HB 671 (2003)

Type of reform: 

HB 671 limited benefits to 75 percent of compensation at the time of retirement. Previously, benefits were 75 percent of the currently effective salary of the office from which the judge retired, and, therefore, included any post-retirement adjustments, such as discretionary salary increases for the position and cost-of-living adjustments (COLAs). Read more…

New Hampshire — Changed Final Salary Calculation, Increased Retirement Age, Reduced COLAs

Posted by Leila Walsh in - -View All States - - on April 23, 2014 with No Comments

Laws:

HB 653 (2007) and HB 1645 (2008)

Type of reform: 

The laws recalculated cost-of-living adjustments (COLAs) and redefined compensation.  In addition:  Read more…

New Jersey — Increased Employee Contribution, Reduced COLAs

Posted by Leila Walsh in - -View All States - - on April 23, 2014 with No Comments

Law:

Senate Bill No. 2937, Chapt. 78-2011 (N.J.S.A. 43:3B-2) (June 2011)

Type of reform:

The bill increased employee contributions, reduced cost-of-living adjustments (COLAs), and reduced retiree medical benefits. Read more…

New Mexico — Increased Employee Contribution, Reduced COLAs

Posted by Leila Walsh in - -View All States - - on April 22, 2014 with No Comments

Law:

SB115 (March 2013)

Type of reform:

SB 115 raised employee contribution rates and reduced cost-of-living adjustments (COLAs) for retirees until the pension plan is 100 percent funded. Read more…

Ohio — Reduced COLAs, Increased Retirement Age, Reduced Benefits

Posted by Leila Walsh in - -View All States - - on April 21, 2014 with No Comments

Law:

Ordinance No. 84-2011 (March 2011), incorporated into the Cincinnati Municipal Code

Type of reform:   

The ordinance increased the retirement age to 60, lowered the multiplier to 2.2 percent of final salary per years of service up to 30 years (2 percent for years of service after 30 years), and lowered cost-of-living adjustments (COLAs) to 2 percent. Read more…

Puerto Rico — Increased Employee Contribution, Increased Retirement Age, Plan Conversion

Posted by Leila Walsh in - -View All States - - on April 21, 2014 with No Comments

Legislation:  Act 160 (December 2013) and  Act 162 (December 2013)

Type of reform:  Act 160 applied to teachers and 1) converts their pension plan from a defined benefit to defined contribution plan, 2) increases employee contributions from 9 percent to 10 percent, 3) increases government contributions between 1 percent and 1.5 percent annually for the next several years, pushing up the current 9.5 percent contribution to 20.52 percent in 2022, and 4) increases the retirement age from 50 to 62 for new employees, and to 55 or 60 for existing employees, depending on years of service The legislation also set a minimum pension of $1,625 for all teachers who retire after the bill is signed into law (increasing the current average by $250) and a minimum pension for currently retired teachers from $400 to $500 per month.

Act 162 applies to members of the judiciary and requires judges to increase their contribution to the pension plan and reduces pensions from 75 percent of the judges’ salary to 60 percent. Read more…

Rhode Island (2010 case) — Increased Retirement Age, Reduced COLAs, Changed Final Salary Calculation

Posted by Leila Walsh in - -View All States - - on April 18, 2014 with No Comments

Laws: 

HB 5983 (2009) and HB 7397 (2010)  

Type of reform:  

The laws increased the retirement age and years of service necessary for retirement, adjusted final average salary, and reduced cost-of-living adjustments (COLAs).

Case:

Rhode Island Council 94 v. Chafee, No. PC 10-2859 (Rhode Island Superior Court, Judge Sarah Taft-Carter) (filed May 12, 2010) Read more…

Rhode Island — Increased Employee Contribution, Plan Conversion, Suspended COLAs

Posted by Leila Walsh in - -View All States - - on April 18, 2014 with No Comments

Law:

Rhode Island Retirement Security Act of 2011 (November 2011)

Type of reform:

The law suspended cost-of-living adjustments (COLAs), increased the retirement age, and moved current employees to a hybrid plan. Read more…

South Dakota — Reduced COLAs

Posted by Leila Walsh in - -View All States - - on April 18, 2014 with No Comments

Law: 

Senate Bill 20 (March 2010)

Type of reform:

The bill reduced cost-of-living adjustments (COLAs) for existing and future retirees.

Case:  

Tice v. State of South Dakota, No. 10-225 (Circuit Court of the 6th Judicial Circuit, Hughes County, Judge Mark Barnett) (filed June 11, 2010) Read more…

Tennessee (Chattanooga) — Increased Employee Contribution, Reduced COLAs

Posted by Leila Walsh in - -View All States - - on April 17, 2014 with No Comments

Law: 

City Ordinance 12813 (March 2014)

Type of reform:

The ordinance reduced the city’s contribution to the Chattanooga Fire and Police Fund by $5.1 million, increased employee contributions by 37 percent, and reduced cost-of-living adjustments (COLAs) for retirees from 3 percent to 1.5 percent.  Additionally, new retirees will not receive a COLA for the first three years of retirement.

Case:

Frazier v. City of Chattanooga Tennessee and Chattanooga Fire and Police Fund, No. 14-0221, (Chancery Court of Hamilton County Tennessee) (filed April 8, 2014); removed to Frazier v. City of Chattanooga and Chattanooga Fire and Police Fund, No. 1:14-cv-00128-CLC-WBC (Eastern District of Tennessee).  Read more…

Tennessee — Reduced COLAs

Posted by Leila Walsh in - -View All States - - on April 17, 2014 with No Comments

Law:  

Modification by the Tennessee Valley Authority (TVA) and Tennessee Valley Authority Retirement System (TVARS) to the existing TVA Rules and Regulations (August 2009)

Type of reform:

The modifications reduce the annual contribution to the pension fund by requiring TVA to contribute $1 billion in 2010, but nothing again until 2014; reduce the cost-of-living adjustment (COLA) for all retirees; permanently reduce an interest rate accrual benefit; and eliminate COLAs for retirees who retire after Jan. 1, 2010, until they reach the age of 60.

Case:

Duncan v. Tennessee Valley Authority Retirement System, No. 3:10-CV-217 (M.D. Tenn.) (filed March 5, 2010)

Read more…

Texas (Houston) — State vs. Local Governance

Posted by Leila Walsh in - -View All States - - on April 17, 2014 with No Comments

Law:

Tex Rev. Civ. Statute Article 6243e

Case:
City of Houston v. Houston Firefighters Relief and Retirement Fund, No. 2014-02548 (District Court of Harris County, 190th Judicial District, Houston, Texas) (filed Jan. 22, 2014) Read more…

Texas (Fort Worth) (2012 Ordinance) — Reduced COLAs, Changed Final Salary Calculation, Eliminated Spiking

Posted by StuartBuck in - -View All States - - on April 16, 2014 with No Comments

Law:

Ordinance 20471-10-2012 (October 2012)

Type of reform: 

The ordinance reduced the multiplier for future years, changed the cost-of-living adjustment (COLA) calculation for future years, raised the number of years used for final average salary, and, to prevent spiking, eliminated the use of overtime for final average salary. Read more…

Texas (Fort Worth) — Changed Final Salary Calculation, Reduced Benefits

Posted by StuartBuck in - -View All States - - on April 16, 2014 with No Comments

Law:

According to local news coverage, the city of Fort Worth proposed in late 2013, during labor negotiations with city firefighters, to limit the pension multiplier and to change the calculation of final average salary by increasing the number of years used and removing overtime pay.

Case: 

Fort Worth Professional Firefighters Association v. City of Fort Worth, No. 048-270181-14 (District Court of Tarrant County, 48th Judicial District) (filed Jan. 22, 2014)

Read more…

Washington — Gainsharing

Posted by StuartBuck in - -View All States - - on April 8, 2014 with No Comments

Law: 

Laws of 2007, ch. 491 (Engrossed HB 2391) (2007)

Type of reform:

The reform eliminated gainsharing, a system by which excess investment gains were shared with plan members and retirees.

Case: 

Washington Education Association v. State of Washington, No. 87424-7 (Washington Supreme Court 2014) Read more…

Washington — Reduced COLAs

Posted by StuartBuck in - -View All States - - on April 8, 2014 with No Comments

Law:

HB 2021 (March 2001)

Type of reform:

The bill eliminated the cost-of-living adjustment (COLA).

Case:

Washington Education Association v. State Retirement Systems, No. 11-2-02213-4 (Thurston County Superior Court) (filed Dec. 16, 2011) Read more…

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