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August 25, 2013 12:39 PM UTC

Denver Post: Government Cannot "Unilaterally Ignore Contracts." Contracts of AIG Executives Must Be Honored. Denver Post, Where is Your Editorial Defending the Contracts of PERA Pensioners?

  • 15 Comments
  • by: PolDancer

That is, the Contracts that Were "Unilaterally Ignored by Government" in 2010?  Vince Carroll, Let's See the Denver Post Editorial Board Act on Principle, Write a Column Defending Existing Public Pension Contracts.

On March 18, 2009, in the thick of U.S. market turmoil, while the public was calling for the heads of the Wall Street banksters, and demanding that government break the contracts of AIG executives, the Denver Post Editorial Board admonished us all to keep our own heads and accept that governments in the United States cannot simply abandon their contractual obligations when it is politically popular to do so.

Yet, just ten months later, when it was politically popular to break Colorado PERA pension contracts, when the political power of Colorado pension administrators, unions officials, corporate interests, statehouse lobbyists, politicians and lawyers fueled the campaign to break the contracts of elderly Colorado PERA pensioners, what did we hear from the Denver Post Editorial Board? Not a peep.

The Denver Post Editorial Board:

"Let AIG execs keep bonuses."

"Who isn't angry about the $165 million in bonuses paid to executives at insurance giant American International Group?"

"The company, on its fourth round of government bailout money, recently paid millions to executives who created the risky derivatives at the epicenter of the financial meltdown."

"The president is up in arms."  "And the public anger is palpable."

"We agree the bonuses are morally indefensible.  But the payments should stand for several reasons.

– The bonus contracts were in place long before the insurance giant took the first federal bailout money in September. And the bonuses were paid legally — part of a program that had been disclosed in advance in filings AIG made with the government, according to the Associated Press."

(My comment to the Denver Post Editorial Board: Colorado PERA pension contracts have been in place for many decades.  The Colorado General Assembly has known for more than 60 years [since Bills/McPhail] that the payment of fully-vested Colorado PERA pension benefits is a contractual obligation of PERA-affiliated employers.  If the members of the Colorado Legislature held the belief (during these six decades) that meeting PERA contractual obligations is a burden on governments in Colorado, they had ample opportunity to adopt PROSPECTIVE, LEGAL pension reforms for the PERA pension system.  Colorado legislators have had six decades to enact PERA pension reforms that lessen any burden on Colorado governments without abrogating existing public pension contracts.  Having enacted policies that reduced Colorado PERA's funded ratio [cutting PERA pension contributions, selling service credit for less than its full actuarial cost in order to reduce state labor costs, failing to pay the full PERA pension bill, funding pensions that are not the State's responsibility, slashing state revenues beyond that required by TABOR] these politicians now seek to push their problem off onto old people.  That is sick.)

Denver Post in March 2009:

"If the government begins unilaterally ignoring contracts, it will create more turmoil in an economic atmosphere that can't sustain any more uncertainty."

(My comment: Denver Post Editorial Board, please tell us why the breach of the contracts of AIG executives in March, 2009 would create unsustainable "uncertainty" yet the breach of the contracts of Colorado PERA pensioners ten months later does not result in such damaging "uncertainty."  Do corporations have greater rights under the U.S. Constitution than public sector workers?  Denver Post Editorial Board, if the truth is that those with power and money have greater rights under the United States Constitution, then tell us so.  Let's get it out in the open.)

http://www.denverpost.com/opinion/ci_11935720

Wikipedia: "AIG Bonus Payments Controversy":

"The AIG bonus payments controversy began in March 2009, when it was publicly disclosed that the American International Group (AIG) was to pay approximately $218 million in bonus payments to employees of its financial services division."

"AIG is notable for having received taxpayer bailouts and in the fourth quarter of 2008 posted a loss of $61.7 billion, the greatest ever for any corporation.  Beyond the $165 million in bonus payments that were recently announced, total bonuses for the financial unit could reach $450 million and bonuses for the entire company could reach $1.2 billion."

"A March 24, 2009 CNN article said that private companies wouldn't feel comfortable doing business with the U.S. government if they thought the government would change the rules after the contracts have already been signed."

"Fred J. Joseph, commissioner of the Colorado division of securities and president of the North American Securities Administrators Association, said 'If these people could get their hands on pitchforks, they really would storm the castle.'"

"In a nationally syndicated opinion column, economist Thomas Sowell claimed that the politicians who did the most to create the situation that led to the use of taxpayer money to fund the bonuses are now the same ones who are complaining the most about the bonuses."

"AIG has defended the bonuses by citing contractual obligations."

"Sorkin also said not paying the bonuses could spark problems across the business community. 'If you think this economy is a mess now, imagine what it would look like if the business community started to worry that the government would start abrogating contracts left and right . . ."

(My comment: "Government abrogating contracts, left and right" . . . where is the condemnation of proposals that government break its contracts lately?  The crowds with pitchforks want public pension contracts to be abrogated, will we appease them? 

Does governmental breach of contract not somewhat diminish the lustre of that "shining city on a hill"?  If the rule of law in the United States is actually a myth, let's be honest about it, and cease the claims of "American Exceptionalism.")

Wikipedia:

"AIG has pointed out that Connecticut, the state where AIG is based, has a law called the Wage Act.  According to the law, employers who don't pay employees the money which they are contractually obligated to pay, could ultimately be required to pay twice that amount."

http://en.wikipedia.org/wiki/AIG_bonus_payments_controversy

Now (For Balance) I Give the Denver Post Editorial Board Some Credit.

In late 2009, the Denver Post did not condemn the ongoing public relations and lobbying campaigns to break Colorado PERA retiree pension contracts, but they did ask the Colorado General Assembly to check with the Colorado Supreme Court prior to acting (by submitting questions to the Colorado Supreme Court through an interrogatory.)  Of course, the Leadership of the Colorado General Assembly ignored this advice.  However, I give the Denver Post Editorial Board their due.  (I give the Editorial Board the same amount of credit that I would give a bank customer who suggests to a bank robber that he check in with the local police regarding the legality of his intended act . . . not much credit, but some!)

(My comment: DP Editorial Board, have you ever wondered why it is that the Colorado PERA pension system needed to be "rescued" when the funding ratio of the Colorado PERA pension system was 69.8 percent, but the PERA pension system did not require any sort of "rescue" in 1973 when PERA's funding ratio was 54.5 percent?  Doesn't add up does it?  By the way, don't fall for Colorado PERA's attempt to deceive the Colorado Supreme Court.  Colorado PERA has inserted a "market-based" funding ratio into its legal briefs instead of the "actuarial funding ratio" it has traditionally used in order to mislead Colorado courts.  This switch is not identified in Colorado PERA's legal briefs and is intended to bolster PERA's case for a PERA "financial crisis."  The funding ratios in SB10-001 and in the Colorado PERA statutes are "actuarial funding ratios."

Standard and Poor's:

"As of Dec. 31, 2008, the state's Public Employees' Retirement Association pension fund (excluding the health care fund) was 69.8% funded, down from 75.1% in 2007 and a high of 105.2% in 2000."

http://www.leg.state.co.us/clics/clics2009a/commsumm.nsf/b4a3962433b52fa787256e5f00670a71/6778eb9ddf2ca301872575ee0050f424/$FILE/0709AttachmentB.pdf)

Denver Post Editorial Board: If you decide to act on principle and defend Colorado PERA pension contracts in an editorial, I suggest that you address one other matter in the same piece.  In 2012, the Colorado Court of Appeals reversed and remanded the PERA retiree COLA case, Justus v, State, to the Denver District Court, simultaneously confirming the contractual nature of the Colorado PERA COLA benefit.  Yet, your Denver Post reporter Tim Hoover, in an article addressing the Court of Appeals decision, labeled this reversal a "win" for Colorado PERA.  Essentially, he parroted Colorado PERA propaganda.  Colorado PERA was happy with the initial Denver District Court's decision that the PERA COLA was not a contractual obligation.  Why would Colorado PERA consider a reversal of the Denver District Court decision a "win" for PERA?  They don't.  They are appealing this finding to the Colorado Supreme Court.  So, Denver Post Editorial Board, publish a (belated) correction to this Denver Post story by Tim Hoover.  Protect journalistic integrity!

Denver Post, October 12, 2012:

http://www.denverpost.com/newsheadlines/ci_21754161/pera-wins-ruling-cuts-pension-raises

 

"WE ARE A COUNTRY OF LAWS.  THERE ARE CONTRACTS.  THE GOVERNMENT CANNOT JUST ABROGATE CONTRACTS."

Larry Summers, Harvard Professor, Director of the National Economic Council in the Obama Administration . . . and next Fed Chairman?

http://www.latimes.com/la-oe-goldberg17-2009mar17,0,3689261.column

"Lawrence Henry 'Larry' Summers (born November 30, 1954) is an American economist.  He served as the 71st United States Secretary of the Treasury from 1999 to 2001 under President Bill Clinton He was Director of the White House United States National Economic Council for President Barack Obama from January 2009 until November 2010.  Summers is the Charles W. Eliot University Professor at Harvard University's Kennedy School of Government.  He is the 1993 recipient of the John Bates Clark Medal for his work in several fields of economics."

http://en.wikipedia.org/wiki/Lawrence_Summers

More on the Sanctity of AIG Executive Contracts, ABC News:

"The potential for a costly lawsuit stems in part from state law in Connecticut, where AIG's now-infamous financial products division — the arm of the company that employs the 400-some employees awarded the $165 million bonuses — is based."

"In a document submitted by AIG to Treasury Secretary Timothy Geithner, the company argues that were it to renege on contractual agreements to make retention payments — which were set in early 2008, before the

government enacted compensation limits under its Troubled Asset Relief Plan — the firm could be liable for 'double damages and attorneys' fees' under the Connecticut Wage Act."

(My comment: Conveniently, public sector entities are generally exempted in these "wage acts."  Thus, public sector workers are forced to rely on the Contract Clause.)

ABC:

"There 'are legal, binding obligations of AIG, and there are serious legal, as well as business, consequences for not paying,' Liddy wrote in a recent letter to Geithner."

"'If we're talking about the possibility of violating the Connecticut or other states' wage act, then there is a real risk that one needs to be concerned about. … Some of these states are fairly punitive,' said Donald P. Carleen, of the law firm Fried, Frank, Harris, Shriver & Jacobson LLP. 'For AIG to do what the public seems to want them to do and certainly what Congress would like them to do could in theory expose them to liability.'"

http://abcnews.go.com/Business/Economy/story?id=7097759&page=1

NYT:

"But the bonuses will go forward because lawyers said the firm was contractually obligated to pay them."

"The administration official said the Treasury Department did its own legal analysis and concluded that those contracts could not be broken."

http://www.nytimes.com/2009/03/15/business/15AIG.html?_r=0

"We Can't Break AIG Bonus Contracts But Worker Pensions?  No Problem!"

"But now that we’re talking about breaking contract to pay back pensions that middle class workers have paid into over the course of their professional careers, well — that’s another story."

"So, where was all this 'fiscally responsible' fighting spirit when it came to paying out $32.6 billion in taxpayer funded banker bonuses?"

"Well, as Larry Summers said, 'we are a country of law.'”

http://fdlaction.firedoglake.com/2011/02/23/we-cant-break-aig-bonus-contracts-but-worker-pensions-no-problem/

Politicsdaily.com:

"The United States is a country that follows the rule of law. And it does so even if that means paying employees of AIG, the failed insurance company whose actions nearly caused a global economic collapse last year, millions of dollars in bonuses."

"The second contract problem, involving the bonus payments, follows from the first.  One year ago, AIG revealed that it was paying its employees $165 million in deferred compensation, even though it was then effectively under government control."

"As then-CEO Edward Liddy explained to Geithner in a letter dated March 14, 2009, AIG entered into contracts with about 400 employees of the Financial Products division that guaranteed a minimum level of pay for 2008 and 2009 as retention bonuses. AIG wrote these contracts before it received the federal bailout and entered the TARP."

(My comment: Note that both the AIG controversy and the Colorado PERA retiree lawsuit, Justus v. State, surround the payment of deferred compensation.)

Politicsdaily.com:

"Despite the outcry, the money was paid.  Liddy explained that 'outside counsel has advised that these are legal, binding obligations of AIG, and there are serious legal, as well as business, consequences for not paying.'"

"Additional details attached to Liddy's letter explained that the tax code specifically limits a company's ability to modify deferred compensation agreements."

"As Liddy emphasized, 'Honoring contractual commitments is at the heart of what we do in the insurance business.  I cannot have our clients lose faith in our desire and ability to do just that."

(My comment: Does it matter at all if citizens of the United States lose faith in the willingness of U.S. state and local governments to honor their contractual commitments?)

Politicsdaily.com:

"Like it or not, the sanctity of contracts rules the land.  And, if AIG's contracts say that AIG's employees will receive $100 million in deferred compensation or that its counterparties will receive a $62 billion payment in full for their investments, then that's what the law says."

http://www.politicsdaily.com/2010/02/06/aig-bonuses-why-those-pesky-contracts-cant-be-ignored/

CNN Money, Corporations Won't Feel Comfortable Doing Business with a U.S. Government that Doesn't Honor Corporate Contracts:

"AIG has been given access to $182 billion in taxpayer funds in the past six months.  Recently it paid out $165 million in retention bonuses to employees in the company's financial products division.  Those bonuses were written into employee contracts written in early 2008."

"Another concern: Companies in the private sector won't feel comfortable doing business with Uncle Sam if they think he'll change the rules on them after a deal is done."

"One option: Legislative aides say lawmakers may try to find a face-saving way out of this — perhaps by passing something that beefs up rules concerning future bonuses while dropping the language about bonuses already paid."

http://money.cnn.com/2009/03/24/news/economy/bonus_tax_onsecondthought/index.htm?source=yahoo_quote

Dean Baker, Co-director, Center for Economic and Policy Research, on Public Pension Contractual Obligations:

"This is a contractual obligation, I just find it kind of striking here, because there is such a selectivity about how we view contracts.  You might remember that back when AIG was bankrupt, there was a big issue that they had these bonuses for their top people, hundreds of thousands of dollars per person, and we ended up paying them, because we got lectures, including from people in the Obama Administration about the sanctity of contracts.  Well, here you have contracts with workers that are actually guaranteed by the state constitution that apparently don't mean anything."

News Program Moderator:

"Let me just emphasize that, because that episode was, it was fairly early in the Obama Administration, there were all of these bonuses set to be paid to top AIG Executives . . .  there was massive populist outrage across the political spectrum and the answer that came from everybody was that these was that these bonuses had to be paid because these were contractual obligations and you could not just rip up contracts."

Dean Baker:

"Exactly . . . when it's ordinary workers rather than folks on Wall Street, they're prepared to rip up contracts.  That's what we're talking about here.  So, I think people should be outraged."

http://www.afscme.org/blog/saunders-on-msnbc-dont-scapegoat-detroit-workers

(My comment: Note that the City of Detroit is currently trying to abandon its public pension contracts in bankruptcy.  Note that the State of Colorado is currently trying to escape its contractual public pension obligations OUTSIDE OF BANKRUPTCY.  World of difference.  Also, note that pensioners in Detroit are paid contracted pension benefits that average $19,000 annually, and that most receive no Social Security benefits.)

Dean Baker, Co-director, Center for Economic and Policy Research on Detroit Pensions:

"But even if Detroit’s workers got a good deal with their pay and benefit package, so what?  A contract is still a contract.  Workers put in their time in exchange for a specific package of pay and benefits, how can the government arbitrarily change the terms of the deal after the fact."

"There are businesses that end up getting very good deals from the government all the time.  How often does a state or local government end up selling a parcel of land for a price that turns out to be hugely below its true value.  Or they may give tax concessions to lure businesses that prove to be overly generous.  It looks like the City of Chicago made a really bad deal in leasing its parking meters to Morgan Stanley for three quarters of a century.  Does Chicago get to just rewrite the terms of the contract?"

"In these cases involving businesses, somehow a contract is a contract, end of story.  The relationship is sacred and no one suggests changing the terms after the fact.  However, in the case of the pensions for city workers, these are just office workers, custodians, or garbage collectors.  The media would have us believe that contracts with these sorts of people aren’t real contracts.  If they prove inconvenient, then they can be changed."

"While that may be the view that the media is trying to push, the rest of us should insist that the law and the constitution be respected.  Detroit’s city workers have as much right to have their contracts respected as the Wall Street bankers making millions and billions off contracts that are often far more questionable."

"This is class war at its ugliest.  The elites have to learn that they don’t get to change the rules as they go along, if they want their contracts to be respected they will have to respect contracts that protect working people as well."

http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/in-detroits-bankruptcy-why-are-contracts-with-workers-a-joke

Colorado PERA members: In 2009, incredibly, Colorado's public sector unions joined the effort to break the contracts of their retired union "brothers and sisters."  Sharp lawyers bought the support of Colorado's public sector unions with the promise to bolster the PERA trust funds by raiding the assets of elderly PERA retirees, leaving the "dues-paying union members" relatively unscathed.  In 2009, Colorado's public sector unions joined the "class war," playing into the sharp lawyers' hands, dividing Colorado PERA members into a group of active members, and a group of retirees whose rights, they believed, could be trashed.  This is the world we live in, and it is going to take time and effort to clean it up.

Fight for your rights!  Support Save Pera Cola!  Contribute at saveperacola.com and Friend Save Pera Cola on Facebook.

Comments

15 thoughts on “Denver Post: Government Cannot “Unilaterally Ignore Contracts.” Contracts of AIG Executives Must Be Honored. Denver Post, Where is Your Editorial Defending the Contracts of PERA Pensioners?

  1. Hey Algernon, good observations.  Indeed, we are losing our tradition of "exceptionalism" in regards to being a nation of laws.  The Colorado judiciary system is under a proverbial microscope, being analyzed and scrutinized by a national audience of interested parties.  Hopefully the Colorado Supreme Court will pass the integrity test being thrust upon it … future generations will judge the outcome.  

  2. Speaking of contracts, I still cannot find my signed copy of the "social contract" that grants government the right to steal the fruits of my labor via taxation?

    1. Nock, the "social contract" is a concept from political philosophy: "Social contract arguments typically posit that individuals have consented, either explicitly or tacitly, to surrender some of their freedoms and submit to the authority of the ruler or magistrate (or to the decision of a majority), in exchange for protection of their remaining rights."

      http://en.wikipedia.org/wiki/Social_contract

      Statutory and written contracts are legal constructs: "A contract is an agreement having a lawful object entered into voluntarily by two or more parties, each of whom intends to create one or more legal obligations between them.  The elements of a contract are 'offer' and 'acceptance' by 'competent persons' having legal capacity who exchange 'consideration' to create 'mutuality of obligation.'"

      A "statutory contract" is "a contract for which a statute prescribes certain terms."  "Statutes usually, govern the contracts made by public entities."

  3. So the new WordPress site clearly doe not limit title length. So I may write a diary called:

    In which Algernon Moncrief Independent Nationwide Public Pension Rights Blogger Publishes Another Long, Unformatted Bunch-o-text on the Same Subject as His Last 37 Diaries.

    1. Hey Club, what are your thoughts on the content of the post?  This is a significant issue facing the State of Colorado and Colorado local governments.  Can Colorado governments break their contracts under the Colorado Constitiution and the U.S. Constitution?  Are corporate contracts superior under the Colorado Constitution and the U.S. Constitution?

      Also, why are you surprised that a public pension rights blogger is blogging about public pension rights?  It's what we do!

      1. The thing is, Algernon,  this type of post is simply too daunting for most. I'm sure many skip my longer winded offerings and the above entry makes my longest look a haiku.  Maybe you could offer a summary and links for those who want to read the entire articles or other sources you  are referencing in a given post. Just a friendly suggestion.

        1. AM, I'll second BC.

          I'm at work. I pop in and out of CP during the day. I suspect most readers are like me. I really don't have time to read your posts. I did a couple of times and found that they just repeated what was you had said before. If you have somethign new to add, give us a brief summary – as in 100 words or less. Follow that with a link. 

          To paraphrase Mark Twain: Take more time and write a shorter diary.

        2. Bluecat, good suggestions from you, Club and ajb.

          I have multiple objectives for my posts, document what I consider to be a "crime" against a vulnerable population, raise awareness of this "crime," remind the perpetrators that this matter will not simply disappear (as they hope), expose hypocrisy and culpability, and defend public pension rights nationally.  No doubt, I am a long-winded blogger.

          Thousands of Colorado PERA retirees are in beds in nursing homes.  There was not much chance in 2010 that they would climb out of these beds and make it to the lobbies of the Colorado State Capitol to fight the lawyers and lobbyists determined to take their property.

      2. I think its an important issue.  But in the world of massive amounts of competing information all shouting for attention, short and more readable text is key.  Shorter.  Bullets.  More paragraphs. Headings, things that break up the test, and allow someone to pull out the parts of the essay most relevant to them. 

        1. In general I think that agreements negotiated between employees and employers should be honored.  Those advocating gutting public service pensions to address systemic economic problems always seem to avoid answering directly the question of if they support reneging on contracts. 

  4. Algernon, here's an idea.  Lower the COLA for current retirees while lowering what current employees contribute towards their pensions.  Colorado WINS would surely like that kind of reform!

    Illinois Lawmakers Reveal Outline for Pension Reform

    http://www.governing.com/news/state/Illinois-Lawmakers-Reveal-Outline-for-Pension-Reform.html

    "Under the outline, the state would cut back the cost-of-living increases that are driving much of the retirement system shortfall but require workers to actually pay less toward their pensions."

    1. Hey hawkeye, funny, I also had that thought when I saw the article.  We'll see what happens . . . but, Illinois' retirees are fired up and not eager to pay off the state's accumulated debts.

      IF THE STATE OF ILLINOIS BREAKS ITS PUBLIC PENSION CONTRACTS, THIS BREACH OF CONTRACT WILL HAVE BEEN A CHOICE RATHER THAN A "NECESSITY."

      A pension reform bill in Illinois will not pass court muster if a "less drastic" reform is available to the Legislature.  Numerous "less drastic" public pension remedies are indeed available to the Illinois Legislature.  The Illinois Legislature could simply extend its recent income tax hike to pay down the state's pension debt.  This solution has the advantages of unquestionable morality and constitutionality.  It is perfectly legal and moral for governments in the United States to pay off their accumulated debts.

      The State of Illinois could impose a financial transaction tax that would be collected by the exchanges in the state.  Dozens of nations around the world impose such a "FTT."  A one dollar tax per transaction (a fraction of the level of such assessments in place in other countries) would raise billions, have an inconsequential impact on the securities industry, and allow the State of Illinois to actually pay its accumulated debts.  The FTT would actually be paid by those industries that created the financial crisis in 2008-09, driving down public pension funding ratios.  The Illinois Supreme Court should take note of the fact that the imposition of a small FTT to meet Illinois' contractual obligations is manifestly a "less drastic" option than the breach of Illinois state contracts.  IF THE STATE OF ILLINOIS BREAKS ITS PENSION CONTRACTS, THIS BREACH OF CONTRACT WILL HAVE BEEN A CHOICE RATHER THAN A "NECESSITY."  Illinois public employees did not cause the pension crisis, they have made uninterrupted pension contributions, unlike the State of Illinois.

      The State of Illinois could consider reforming its state tax system, closing corporate tax loopholes that cost the state billions, and re-amortizing the state's pension debt over its life 50-70 years.  (See Ralph Martire's public pension refinancing plan.)

      The Illinois Legislature could also consider lowering the rate of FUTURE accrual of pension benefits in the state by reducing the public pension "multiplier" on a PROSPECTIVE basis (for pension benefits not yet accrued.)  See Professor Amy Monahan's paper: "Public Pension Reform: the Legal Landscape."  She is Professor of Law at the University of Minnesota School of Law, and the foremost expert in the U.S. on public pension contractual obligations.

      (Note that Eric Madiar, Illinois Senate President Cullerton's legal counsel argues that such a reform is not permissible under the Illinois Constitution's pension protection provision.  However, it seems counterintuitive that any RETROACTIVE public pension reform, such as a COLA-taking, might be considered legally preferable to a PROSPECTIVE pension reform, such as a multiplier reduction.)

      Let's be clear . . . taking "fully-vested," contracted, earned, and accrued public pension COLA benefits from current Illinois retirees is the MOST DRASTIC idea that has been put forth.  Touch current retiree contracted benefits . . . be sued . . . arrive back at Square One in a couple of years.

      CULLERTON'S CHIEF LEGAL COUNSEL ERIC MADIAR: COLORADO'S BREACH OF PENSION COLA CONTRACTS WILL LIKELY BE FOUND UNCONSTITUTIONAL.

      Cullerton's legal aid Eric Madiar believes that Colorado's recent theft of fully-vested, accrued public pension COLA benefits is likely unconstitutional.  So, why is Cullerton going down this path in Illinois?

      From “Public Pension Benefits Under Siege”:

      “The adoption of the contractual approach by Colorado . . . however, make(s) it more likely that pension reform efforts (the COLA provisions of SB 10-001) will be found unconstitutional.”

      A PDF of the Madiar paper is available on the website of the National Conference of State Legislatures at the following link:

      http://www.ncsl.org/home/search-results.aspx?zoom_query=madiar%20public%20pensions

      Support public pension contractual rights in the U.S., contribute at saveperacola.com!  Friend Save Pera Cola on Facebook!

  5. Hey Algernon, as you may recall, after the dot-com bust at the turn of the century, the PERA Board was composed mainly of financial novices who made the downturn of the PERA fund even worse with some widely acclaimed foolhearty changes in the investment allocations, as in sell low (stocks) buy high (bonds). At least the governor's appointees to the board will have some pertinent experience in the finance sector.

    https://copera.org/pera/about/latestnews.htm#murphy

    Governor Reappoints Murphy to PERA Board

    "Governor John Hickenlooper reappointed Susan G. Murphy to the Colorado PERA Board of Trustees. Murphy was originally appointed to the PERA Board of Trustees in 2007. By law, governor-appointed trustees must have experience in investment, management, finance, banking, economics, accounting, pension administration, or actuarial analysis. Her current term expires on July 10, 2017."

    1. PERA's Past Investment Fiascoes:

      Colorado PERA Executive Director Meredith Williams, February 23, 2012, on the Colorado PERA Board’s historical investing mistakes, and the impact of these mistakes on the Colorado PERA Trust Funds:

      “Ten years ago we were pretty aggressive in real estate, very aggressive might be a better characterization.  We were very aggressive in what I’ll call private equity or alternatives.  At the board’s direction we’ve pulled in our horns substantially, about seven and a half of the portfolio in each of those two, used to be fifteen in each.  I think that the portfolio as we headed into the dotcom bust was far riskier than it is today.  We paid the price for that.”

      (My comment: Meredith Williams tells us here that PERA “paid the price” for its past investing mistakes.  Here he admits that the Colorado PERA Board of Trustees has historically made mistakes in setting the asset allocation of the Colorado PERA trust funds.  I ask: Why should Colorado PERA retirees, who bear no “market risk” in their “defined benefit” pension plan, whose contractual public pension rights are “fully-vested,” why should these Colorado PERA retirees pay the cost of the PERA Board’s past investing mistakes by relinquishing their contracted pension benefits?)

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