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February 15, 2013 09:44 PM UTC

Colorado PERA "SHALL" Pay its Debts . . . Under Any Definition of the Term.

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  • by: PolDancer

The lawyers who work for the Colorado Legislature have a “drafting manual” to assist them in preparing Colorado’s laws.  It’s called the Colorado Legislative Drafting Manual.  These lawyers wrote the Colorado law stating that Colorado PERA retirees SHALL receive a contracted 3.5 percent PERA COLA benefit, and that Colorado PERA members who have purchased service credit SHALL receive benefits based on that purchase that were in effect in Colorado law at the time of the purchase.

Now, the Colorado General Assembly, (having enacted those laws) wants to retroactively change them.  The General Assembly wants to change the terms of this PERA statutory contract to claw back benefits that have already been earned and paid for by Colorado PERA retirees.  Our state wants to break its contracts with old people.  Colorado wants to break the contracts of people who gave their working lives to (and trusted) Colorado state and local governments.  It’s one thing to reduce a discretionary benefit.  It’s quite another to break a contract.

According to the September 29, 2010 version of the Legislative Drafting Manual, the Colorado Legislature’s lawyers believe that “shall” means mandatory.  The lawyers have another word that they use if they want to indicate that an action is discretionary. That word is “MAY.”

Colorado Legislative Drafting Manual, Revised 9/29/2010:

Drafting Manual, page 5-15 – “In the statutes, ‘shall’ should be used to indicate a command.”
Drafting Manual, page 5-18 – “Use the word ‘shall’ in statutory directions or requirements.”
Drafting Manual, page 5-19 – “‘Shall’ indicates a command.”
Drafting Manual, page 5-19 – “Use ‘may’ to grant discretion.”

The provision in Colorado law providing the contracted Colorado PERA 3.5 percent COLA benefit (prior to its retroactive alteration by SB10-001) read:

Colorado Law – Section 24-51-1002 (1), Colorado Revised Statutes, “ . . .the cumulative increase applied to benefits paid SHALL be recalculated annually as of March 1 and SHALL be the total percent derived by multiplying three and one-half percent, compounded annually, times the number of years such benefit has been effective . . .”

Under Colorado law, members of Colorado PERA who purchase PERA service credit SHALL receive Colorado PERA pension benefits in effect at the time of the purchase:

Colorado Law – Section 24-51-502 (3), Colorado Revised Statutes, “Service credit purchased by members . . . SHALL be subject to the benefit provisions in effect for the existing member contribution account.”

(Note that the Colorado General Assembly’s Legislative Drafting Manual is periodically revised. It’s now updated electronically on the Legislature’s website.)

In November of 2011, the Colorado General Assembly’s Legislative Drafting Manual was revised.  Drafting rules (on pages 5-16 through 5-20) relating to use of the word “shall” in Colorado law were changed.  According to the November 29, 2011 version of the Legislative Drafting Manual, “shall” now means “has a duty to.”  (Note that the date of revision on the Legislative Drafting Manual is found on the final page of the document.)

From the November 29, 2011 Legislative Drafting Manual:

“Shall” means that “a person ‘has a duty to.’"

“(a) Shall. Use ‘shall’ to impose a duty on a person.  ‘Will’, ‘must’, and ‘should’ should not be used as a substitute for ‘shall’.”

“(II) When using ‘shall’ to mandate an action in which the outcome is in the discretion of the actor, include alternative actions the actor may take:

Avoid: The commissioner shall approve an application within thirty days.

Write: The commissioner shall approve or deny an application within thirty days.

(c) May. Use ‘may’ to permit or grant discretion or authority with regard to a thing or person.”

In my mind, it doesn’t really matter whether Colorado PERA is “commanded” to provide the 3.5 percent contracted COLA benefit, or Colorado PERA “has a duty” to provide the 3.5 percent contracted COLA benefit.  Under either set of legislative drafting definitions, Colorado PERA is required by law to pay Colorado PERA retirees their contracted, accrued 3.5 percent COLA benefit as deferred compensation.  Thus, Colorado PERA and the State of Colorado are currently in breach of contract.

For those who are interested in this topic, it has been thoroughly debated at meetings of the Colorado General Assembly’s Committee on Legal Services (extensive discussion at the March 22, 2012, April 27, 2012 and November 14, 2012 meetings.)  Here are archived minutes of these meetings:

http://tornado.state.co.us/gov_dir/leg_dir/olls/committee_on_legal_services_archive.htm

Here’s a link to Committee on Legal Services audio back to 2011:

http://www.leg.state.co.us/clics/clics2013A/cslFrontPages.nsf/Audio?OpenPage

Here’s a link to the latest version of the General Assembly’s Legislative Drafting Manual:

http://www.state.co.us/gov_dir/leg_dir/olls/ldm/olls_drafting_manual.pdf

I believe that every member of the Colorado PERA pension SHALL (in the sense of “has a duty to”) stand up for their contractual public pension rights.  How to do this?  Contribute to saveperacola.com.  (Their website explains how you can make a donation.)  Also, PERA members SHALL “Friend” Save Pera Cola on Facebook.

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