June 22, 2013 10:45 AM UTC
Colorado PERA Staff Attorney Appointed PERA General Counsel: PERA's Collective Cognitive Dissonance Persists.
1 Comments- by: PolDancer
The "post-Meredith shuffle" continues at Colorado PERA. Today, (June 21, 2013) Colorado PERA announced that staff attorney Adam Franklin will replace Greg Smith as Colorado PERA's General Counsel. Last year, the Colorado PERA Board of Trustees appointed Greg Smith to be PERA's Executive Director (after the departure of Executive Director Meredith Williams.)
From the announcement of Adam Franklin as PERA's General Counsel on the Colorado PERA website:
"Franklin has served as a Senior Staff Attorney at PERA since January 2007."
Link:
https://www.copera.org/pera/about/latestnews.htm#gc
Former Colorado PERA Executive Director Meredith Williams was at PERA's helm during the Colorado General Assembly's 2010 PERA pension contract breach. Current Colorado PERA Executive Director, Greg Smith served as Colorado PERA's General Counsel during the PERA contract breach, providing the Colorado PERA Board of Trustees with legal advice, prior to and during the 2010 contract breach. The legislation breaking Colorado PERA pension contracts (SB10-001) was recommended by the Colorado PERA Board of Trustees (most of the provisions of the ultimate bill were PERA Board recommendations.) As Meredith Williams has informed us, nearly all of the Colorado PERA Board's pension reform recommendations in 2009 "came out of the hides" of PERA retirees, rather than coming from those who ACTUALLY OWE THE PERA PENSION DEBT, Colorado PERA-affiliated employers. As Colorado PERA officials have informed us, 90 percent of the savings in their 2009 reform recommendation came from taking accrued PERA pension COLA benefits from retirees with "fully-vested" PERA pension contracts.
In 2010, the Colorado PERA Board of Trustees, (a board composed of fiduciaries) became one of a handful of public pension governing bodies in U.S. history that has advocated breaking the pension contracts of persons who have retired in their pension systems. Yes, incredibly, PERA trustees with fiduciary obligations formally recommended as board policy the breach of the contracts of members of the pension trust. It's clear where the "reform" is really needed.
The Colorado Court of Appeals has confirmed the contractual status of the PERA COLA benefit:
October 11, 2012
Colorado Court of Appeals 2012 decision in Justus v. State:
“We consider McPhail and Bills dispositive (indisputably bringing to a conclusion a legal controversy) of whether plaintiffs here have a contractual right to a particular COLA.”
http://saveperacola.files.wordpress.com/2010/01/2012-10-11-judgment-reversed-and-case.pdf
Soon after presiding over the 2010 Colorado PERA pension contract breach, Meredith Williams began job hunting (here's a reference to Meredith's job hunt in November 2010):
"Texas Teachers picks 5 finalists for executive director."
http://www.pionline.com/article/20101123/DAILYREG/101129968
Why was Meredith job hunting just months after the PERA pension contract breach? Was Meredith not on the same page with the PERA Board of Trustees on the COLA taking? Or, did he just need a change of scenery? In any event, Meredith succeeded in escaping the aftermath of Colorado PERA's self-inflicted SB10-001 legal fiasco.
COLORADO PERA OFFICIALS AFTER THE CONTRACT BREACH: THE COLA IS NOT CONTRACTUAL.
It has been reported that Colorado PERA's new General Counsel (in my opinion . . . conveniently) believes that fully-vested, accrued PERA COLA benefits taken in the bill SB10-001 are not contractual obligations of the Colorado PERA pension system. Adam Franklin, Senior Staff Attorney, Colorado PERA, April 5, 2011 (as documented by the organization Friends of PERA):
“PERA believes that the COLA formula is not contractual.”
Link:
http://www.friendsofpera.com/0405meeting.pdf
Given that Colorado PERA is currently a defendant in a lawsuit generated by the Colorado General Assembly's 2010 taking of contracted PERA COLA benefits, I believe that it would have been prudent for the Colorado PERA Board of Trustees to ensure that PERA's new General Counsel (Adam Franklin) holds the same opinion as Colorado PERA's administrative leadership on this important question of the contractual nature of PERA COLA benefits. It appears that newly appointed Colorado PERA General Counsel Adam Franklin's opinion on this question differs from that of former Colorado PERA General Counsel (and current PERA Executive Director) Greg Smith's opinion.
COLORADO PERA OFFICIALS BEFORE THE PENSION CONTRACT BREACH: THE COLA IS CONTRACTUAL
November 30, 2008
Colorado PERA General Counsel Greg Smith: “The attorney general's opinion seems clear that fully vested employees — those retired or with enough years of service to retire — cannot see any benefits reduced, including cost-of-living adjustments.”
http://www.denverpost.com/news/ci_11105271#ixzz0eEZGoxly)
December 16, 2009
Colorado PERA officials in written testimony to the Joint Budget Committee: “The General Assembly cannot decrease the COLA (absent actuarial necessity) because it is part of the contractual obligations that accrue under a pension plan protected under the Colorado Constitution Article II, Section 11 and the United States Constitution Article 1, Section 10 for vested contractual rights.”
Link:
http://www.kentlambert.com/Files/PERA_JBC_Hearing_Responses-12-16-2009_Final.pdf
Former Colorado PERA Executive Director Meredith Williams has also noted his respect for "fully-vested" Colorado PERA pension contracts:
December 2008
Colorado PERA Executive Director Meredith Williams commenting on Colorado Attorney General Ken Salazar’s 2004 Formal Opinion on PERA benefits (PERA Retiree Update, page 1):
“The AG’s opinion states that when a PERA member retires and begins receiving pension benefits such member’s pension rights have fully vested and such pension benefits may not be reduced.”.
https://www.copera.org/pdf/5/5-40-08.pdf
December 8, 2008
"Ask Meredith" column on Colorado PERA website: “That leaves the benefits being earned by members (active and inactive) as the only area to examine for savings. The Attorney General’s opinion contains the following language: 'Once a PERA member fulfills all the statutory requirements for a pension benefit, retires and begins receiving a pension, the member’s fully vested pension right cannot be reduced by the General Assembly.'”
https://www.copera.org/pera/about/askm.htm
January 2009
Colorado PERA Executive Director Meredith Williams: “The AG’s opinion states that when a PERA member retires and begins receiving pension benefits such member’s pension rights have fully vested and such pension benefits may not be reduced.”
https://www.copera.org/pdf/Topics/2009/Topics1-09.pdf
February 23, 2012
Meredith Williams, Feb 23, 2012, House Finance Committee:
"What you did in 2010, with Senate Bill1, no one in the country has done anything comparable . . . and this was pretty dicey stuff, and this is why we had to walk on that razor's edge. You can't fix it (the PERA pension system) too much, because over 90 percent of the fix incorporated in Senate Bill 1 in 2010 came out of the hide of people in the system . . . less than ten percent of that fix came from our employers/taxpayers. No one has ever done anything quite like that. I am quite anxious for the litigation to get behind us."
In 2008, when Colorado PERA officials were asked (by legislative staff) if PERA pension contracts can be broken in the event of "actuarial necessity," PERA officials responded (in writing) that a 2004 Colorado Attorney General Opinion states that a Colorado PERA retiree's "fully-vested" pension benefits cannot be reduced by the Colorado General Assembly.
COLORADO GENERAL ASSEMBLY – JOINT BUDGET COMMITTEE
FY 2009-10 STAFF BUDGET BRIEFING
December 22, 2008 – Joint Budget Committee staff question to Colorado PERA:
"Has PERA discussed what constitutes an actuarial emergency? At what funding level would this occur? Is declaring an actuarial emergency the only way the Association can support increasing the employee contribution to help address the unfunded liability? Is declaring an actuarial emergency more feasible now given the financial crisis and the drop in PERA's market valuation?"
Below is the written response from Colorado PERA officials to the JBC staff in 2008. (It would also be interesting to listen to the tape of this legislative hearing, for PERA staff's verbal response to the question, as well as the January 5, 2009 PERA meeting with the JBC.)
December 22, 2008 – PERA Response to Joint Budget Committee:
"The AG further concluded that, once a PERA member fulfills all the statutory requirements for a pension benefit, retires and begins receiving a pension, the member's fully vested pension right cannot be reduced by the General Assembly."
Link:
http://www.tornado.state.co.us/gov_dir/leg_dir/jbc/2008-09/perbrf.pdf
Recall that the Colorado General Assembly did not declare an "actuarial emergency" prior to enacting SB10-001. Why would they? They had plenty of revenue to continue paying off $700 million in legacy pension obligations of Colorado local governments that ARE NOT the contractual obligation of the State of Colorado (Old Hire Fire and Police pension obligations.)
As I understand it, attorneys are required to zealously defend the interests of their clients. This requirement may account for what we (as laypeople) perceive as a sort of collective cognitive dissonance of Colorado PERA officials on the question of the contractual nature of accrued PERA COLA benefits.
Colorado PERA active and retired members, support public pension contractual rights and the rule of law in Colorado. Contribute at saveperacola.com and "Friend" Save Pera Cola on Facebook!
Fixing California: Soaring pension costs imperil services
Hard to imagine that 3% of state expenditures going toward public employee pensions imperil 'critical' services. I figure there's probably a long laundry list of discretionary services people would like to have, and perhaps see public pension cuts as a revenue source.
http://www.utsandiego.com/news/2013/jun/22/fixing-california-soaring-pension-costs-imperil/