Search Results for: coffman

As we know, Colorado PERA has testified to the Colorado General Assembly’s Joint Budget Committee that public pension benefits in Colorado cannot be reduced by the General Assembly:

“Terms of the plan are legally binding and protected from reduction by the Constitution.”

Link:

http://www.kentlambert.com/Fil…

The Colorado Court of Appeals finds itself agreeing with Colorado PERA in regard to the contractual nature of public pension rights:

“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.”  In the cases McPhail and Bills, the Colorado Supreme Court “found a contractual right based on members’ provision of services and contributions to the retirement fund.”

The Colorado Court of Appeals also reversed the Denver District Court’s summary judgment on the plaintiff’s “Takings Clause claim.” On page 36 of its decision, the Colorado Court of Appeals restores the plaintiff’s Takings Clause claim and cites the case Lynch: “contract rights can constitute property interests protected by the Takings Clause.”

One would imagine that such consensus would bring an end to the dispute over the Colorado General Assembly’s 2010 taking of contracted, vested PERA retiree COLA benefits in SB 10-001.

However, in spite of the consensus, the Colorado PERA Board of Trustees continues to press for the breach of PERA pensioner contracts and has appealed the recent Colorado Court of Appeals decision to the Colorado Supreme Court.  

If the ultimate resolution of the case Justus v. State remains far off in the future, in the interim period, I believe that the parties to the case would benefit from the examination of certain materials related to Colorado PERA contractual pension rights.  The discovery of these materials should be a relatively simple matter given that Colorado PERA is a “transparent” organization.  

Here are some materials I’m interested in:

In 2005, a commission appointed by the Colorado Treasurer, the “Commission to Strengthen and Secure PERA” completed a report to the Treasurer.

Here’s a link to the final report of the “Commission to Strengthen and Secure PERA”:

http://www.copera.org/pdf/Misc…

I’m not particularly interested in the commission’s report itself.  Rather, I’m interested in the transcripts of the hearings from deliberations of the commission.  During these deliberations, the commission received testimony from Colorado PERA officials and from the Colorado Attorney General’s Office relating to the contractual nature of Colorado public pension benefits.  

Transcripts of these commission hearings were once available on the website of the Colorado State Treasurer.  I suspect that Colorado PERA, or the Colorado Treasurer’s Office has retained copies of these transcripts.  Assistant Attorney General Heidi Dineen of the Colorado Attorney General’s Office testified before the commission in regard to contractual public pension rights.  (Heidi Dineen’s name, by the way, is at the bottom of the 2004 Colorado AG opinion addressing Colorado pension contractual rights.)

Transcripts of the commission’s hearings have been mentioned in the press.  Here are a few examples:

Silver and Gold Record, June 16, 2005:

“Romero advised PERA members to look at the state treasurer’s Web site, which has a link to the commission and meeting transcripts . . .”

Link:

https://www.cu.edu/sg/messages…

Silver and Gold Record, July 14, 2005:

“According to a transcript of the June 17 meeting, Brian Anderson of the treasurer’s office responded to concerns about the commission’s private operations, by noting that an informal opinion from the attorney general’s office stated that the commission is not a public body because it acts in an advisory capacity rather than as a policy-making body.”

Link:

https://www.cu.edu/sg/messages…

Here are a few quotations of Assistant Attorney General Heidi Dineen in the press relating to Colorado public pension contractual rights:

“At its most recent meeting on April 15, the commission heard from Assistant Attorney General Heidi Dineen on state case law regarding pensions and the legal tests required for reducing benefits.”  “‘You can reduce the pension for a person you haven’t even hired, [but] you can’t reduce the pension for a retiree,’ Dineen said, adding that the middle of that continuum is where changes can be made.”

“A commission formed by State Treasurer Mike Coffman to examine the status of the Public Employees’ Retirement Association is looking at its legal options for reducing employee pension benefits.”

“Dineen explained that in the 1980s, the Colorado Supreme Court ruled on a case involving fire and police pensions, and that ruling established what is known as the Peterson test.  The plaintiff in that case argued that no changes could be made to public employees’ pension plans after being hired.  The court rejected that argument, Dineen said, and decided to allow adverse changes that meet one of three conditions.”

“Under the Peterson test, any adverse change to a partially vested pension plan must: be balanced by a corresponding change in benefits, be a change that is ‘actuarially necessary’ or be a change that strengthens or improves the pension plan, according to Dineen.”

“However, under the definition of ‘partially vested’ in the Peterson test, the plan also must have unfunded liabilities and not be meeting the current costs of pension benefits, she said.”

Link:

https://www.cu.edu/sg/messages…

Here are some more materials I’m interested in (of course, some of these documents may be “privileged”):

–  I seem to recall reading that Colorado PERA Executive Director Greg Smith has written in the past relating to contractual public pension rights.  I would like to see his thoughts on this subject prior to commencement of the PERA Board’s efforts to breach PERA pensioner contracts.

–  Communications between PERA officials/administrators and public sector union officials relating to the development of the 2009 PERA Board pension reform recommendations.

–  Communications between PERA officials/administrators and representatives of Governor Ritter’s Office relating to the development of the 2009 PERA Board pension reform recommendations.

–  Communications between PERA officials/administrators and SB 10-001 co-prime sponsor Brandon Shaffer/other legislators relating to the development of the 2009 PERA Board pension reform recommendations.

–  Communications between PERA officials/administrators and the General Assembly’s Office of Legislative Legal Services relating to the development of the 2009 PERA Board pension reform recommendations.

–  Internal Colorado PERA e-mails/communications relating to the development of the 2009 PERA Board pension reform recommendations.

–  Any materials provided by Colorado PERA representatives or Senator Josh Penry or Senator Paula Sandoval to Nicole Myers of the General Assembly’s Office of Legislative Legal Services regarding an amendment to SB 09-282 placing into the PERA statutes a requirement that the Colorado PERA Board of Trustees provide pension reform recommendations to the General Assembly.  (I would like to know if Colorado PERA essentially “asked itself” to provide recommendations to the General Assembly.)

–  Instructions provided by Colorado PERA to actuaries involved in the 2009 examination of alternative PERA pension reforms.

–  Transcripts and audio recordings of Colorado PERA Board of Trustees deliberations of pension reform alternatives.

–  Colorado PERA published materials relating to the contractual public pension rights.

My hope is that through these materials we might learn the extent to which Colorado PERA Executive Director Greg Smith encouraged or discouraged the attempt to breach public pension contracts by the PERA Board.  We may also learn whether (as I suspect) the plan to breach PERA pensioner contracts was premeditated, i.e., whether a faГ§ade of false deliberation was constructed by Colorado PERA lobbyists and public sector union lobbyists to lend credibility, objectivity, and legitimacy to a preordained conclusion to breach PERA pensioner contracts.

These are some of the materials relating to Colorado public pension rights that I believe should be available to the public.  However, in spite of the “transparency” of Colorado PERA, I have questions regarding the extent to which Colorado PERA is obligated to make these materials available.  In seeking an answer to my questions, I found guidance in an excellent article published in The Colorado Lawyer in 2007 by Caleb Durling of the law firm Reilly Pozner LLP.

The article, “The Pension Committee Decision: The Duty to Preserve Records” is publicly available on the internet at this link:

http://www.rplaw.com/wp-conten…

Here are a few relevant excerpts from the article:

“By now, it should be abundantly clear that the duty to preserve means what it says and that a failure to preserve records- paper or electronic-and to search in the right places for those records, will inevitably result in the spoliation of evidence.”

“Over the last decade, courts have refined the obligations of parties to preserve and collect paper and electronic documents.”

“Judge Scheindlin has turned to the thornier problems of defining parties’ obligations to preserve and collect relevant documents, both paper and electronic, and the sanctions for the parties who do not act willfully or in bad faith but who, by handling their discovery obligations with a ‘pure heart and an empty head,’ cause the loss or destruction of documents through negligence or gross negligence.”

“As with her Zubulake opinions, courts and litigants across the country, including in Colorado, will rely on Judge Scheindlin’s framework and reasoning in Pension Committee when discovery problems emerge, particularly with regard to the loss of paper and electronic documents due to carelessness or gross negligence.”

“As a result, she awarded monetary sanctions to the plaintiff and ordered that the plaintiff also was entitled to an adverse inference instruction concerning the deleted e-mails and destroyed backup tapes.”

“The goals of sanctions are to: (1) deter spoliation; (2) place the risk of erroneous judgment on the spoliating party; and (3) restore the prejudiced party to the position it would have been in but for the wrongful destruction.”

“The case has two overarching takeaways for litigants. First, document preservation is an obligation that cannot be ignored. Second, there now are relatively well-defined standards of conduct and sanctions available to enforce that obligation.”

“Pension Committee removes all doubt concerning both the duty to preserve paper and electronic documents and the sanctions that can result for even the negligent failure to satisfy that duty.”

In regard to “litigation holds,” Mr. Durling writes:

“Zubulake IV, the most influential of the five opinions, held that a party’s duty to preserve documents arises when ‘a party reasonably anticipates litigation.'”

“The duty to preserve arises, as Judge Scheindlin explained in Zubulake IV, when ‘a party reasonably anticipates litigation.’  At that point, the party must suspend any routine document retention and destruction policy and institute a litigation hold.”

” . . . the ‘failure to issue a written litigation hold constitutes gross negligence because that failure is likely to result in the destruction of relevant information.'”

I wonder, at what point did Colorado PERA anticipate litigation resulting from the recommendation to breach PERA pensioner COLA contractual obligations?  At what point did Colorado PERA institute a “litigation hold” in this regard?

I seem to recall numerous statements from Colorado PERA officials in the last decade regarding their expectation that PERA members and retirees would litigate any breach of their pension contracts.   Such statements may very well be found on the transcript of the “Commission to Strengthen and Secure PERA.”  In all likelihood, such statements were made during Colorado PERA’s 2009 statewide road trip campaign to build support for the breach of PERA pensioner contracts.

At a minimum, a quick search reveals that Colorado PERA officials expected this litigation as of January 15, 2010.  On January 15, 2010, PERA officials were quoted in the press stating that they expect litigation over the PERA Board’s proposal to breach public pension contracts:

“That’s where the lawsuits come in.  Williams and others say numerous PERA members, especially retirees, have indicated they are likely to pursue litigation if their benefits are cut.

No matter what, ‘There will be lawsuits,’ Williams said.

Link:

http://www.coloradostatesman.c…

Was Colorado PERA’s “litigation hold” in place as of January 15, 2010?

DID THE COLORADO GENERAL ASSEMBLY ACTUALLY REQUEST THAT COLORADO PERA MAKE RECOMMENDATIONS TO ADDRESS THE DECREASE IN PERA ASSETS IN 2009?

OR, DID PERA LOBBYISTS PUT THIS LANGAUGE INTO LAW TO PROVIDE COVER FOR A PREMEDITATED BREACH OF PENSION CONTRACTS?  

ENQUIRING MINDS.

Admittedly, my trust in Colorado PERA has worn

thin.

Nevertheless, given: Colorado PERA’s track record in its attempt to escape its contractual obligations,

–  its apparent indifference to all moral, and legal restraints,

–  its disregard for an on-point Colorado Attorney General opinion,

–  its disavowal of unmistakable, adverse legal authority,

–  its cavalier abandonment of the rule of law,

–  its creative interpretations of the term “fiduciary duty,”

–  its habits of deception and demonstrated desire to mislead,

–  its lack of good faith and fair dealing with PERA pensioners,

–  its eagerness to “change the ground rules in the middle of the game,”

–  its use of trust fund beneficiary assets to finance litigation to breach the contracts of those beneficiaries,

–  its use of trust fund beneficiary assets to finance PERA propaganda, as well as political, and lobbying campaigns to breach PERA pensioner contracts,

–  its unabashed manipulation of elected officials to achieve desired policy outcomes,

–  its summary rejection of legal, prospective, “less drastic” alternatives to the breach of pensioner contracts (that have been adopted across the nation),

–  its hypocrisy in placing a 100 percent funding threshold into pension reform legislation in light of its own past policies of underfunding the pension,

–  its complicity in creation of the “problem” it now uses to justify pension contract breach,

–  its ridiculous boasts of “transparency,”

–  its willingness to use a position of power and trust to take earned benefits from elderly, powerless pensioners,

–  its historical failure to emphatically and regularly implore the General Assembly and other PERA-affiliated employers to meet their annual required contributions,

–  its disingenuous characterization of market volatility as a rationale for pension contract breach,

–  its employment of the complex and confusing nature of public pension administration as a means to mislead,

–  its construal of what is in essence a “crime” as something laudable . . . a “model” for other states,

–  its desire to inflate away legitimate government debts through seizure of contracted COLA benefits,

–  its attempt to shift the public debt onto the backs of a relatively small group of pensioners,

–  its pride in having successfully breached pensioner contracts,

–  its use of tactics to breach contracts that shock the conscience,

–  its casual preference to welch on the public debt, and most reprehensible of all,

–  its betrayal of the trust of PERA pensioners who held up their end of the bargain,

. . . given the countless misdeeds of Colorado PERA that we have documented here, I do not believe that raising legitimate questions regarding the motives of Colorado PERA’s board members and administrators is unwarranted.

2010 PERA Board: We had to breach contracts due to the market downturn.

Meredith Williams, Colorado PERA’s former Executive Director assured PERA retirees in the past that market volatility has no impact on their contracted pension benefits:

“The value of your PERA benefit is based on highest average salary and years of service (a “defined” formula) and does not fluctuate based on market performance.”

Link:

http://www.copera.org/pera/abo…

And yet again in 2010, State Treasurer and PERA Board member (at the time) Cary Kennedy tells us that SB 10-001 was enacted as a result of market volatility:

“Responding to this unprecedented drop, some states, including Colorado, took steps to shore up the solvency of their pension funds.”

Link:

http://blog.ednewscolorado.org…

The Colorado PERA Board claims credit for SB 10-001 as well as for the “100 percent” actuarial funded ratio threshold in SB 10-001:

Colorado PERA, “The Colorado PERA Board’s recommendation largely became SB 10-001.”

Link:

http://www.copera.org/pdf/5/5-…

From the PERA website:

“The work of the Colorado PERA Board culminated in the crafting of Senate Bill 10-001 (SB 10-001.)  The Colorado PERA Board supported the recommended bipartisan changes to the bill by Senate President Brandon Shaffer and Senator Josh Penry since the changes still accomplished the Colorado PERA Board’s goal of reaching 100 percent funding levels for each of Colorado PERA’s divisions in 30 years.”

Link:

http://www.copera.org/pdf/5/5-…

Again, will the members of the PERA Board please explain how the decision to place a 100 percent actuarial funded ratio in SB 10-001 was reached in light of the PERA Board’s historical policy of capping the actuarial funded ratio of the PERA Trust Funds at a 90 percent level?  Did no board member take note of the hypocritical nature of this recommendation?   It has historically been Board policy to maintain a degree of PERA pension underfunding (10 percent), and yet it is now Board policy to breach retiree contracts to the point that a 100 percent actuarial funded ratio is achieved.  As we have seen, the 1999 George K. Baum study performed under the auspices of Colorado PERA (it’s on PERA letterhead) for State Treasurer Mike Coffman asks:

“Why does PERA appear to have a policy to keep a 10% unfunded liability?”

Colorado PERA’s propaganda has emphasized that the Colorado Legislature requested that the PERA Board of Directors make recommendations to shore up the PERA trust funds.  I ask if this Colorado PERA assertion is an attempt to mislead.

Colorado PERA went so far as to emphasize the General Assembly’s “legislative mandate” in a Response Brief submitted to the Denver District Court:

“By LEGISLATIVE MANDATE the PERA Board extensively studied the underfunding and consulted with its members . . . before proposing a solution to the General Assembly.”

Link:

http://www.ednewscolorado.org/…

I ask: Did Colorado PERA plant this request language into SB 09-282 at the end of the 2009 legislative session in order to lend a patina of legitimacy to what was in fact a premeditated attempt to breach pension COLA contractual obligations?

Recall Senator Lundberg’s statement on the Senate floor during the SB 10-001 debate: “This bill is a deal that was cut before this body met.”

Was Colorado PERA’s ostensible, impartial examination of pension reform options in 2009 in reality an elaborate ruse constructed by PERA lobbyists to add legitimacy to a process with a predetermined conclusion?  To falsely portray a preordained conclusion to breach pension COLA contracts as the result of an extensive, deliberative process?

We should know the answers to these questions.  (If Colorado PERA is such a “transparent” organization as it boasts, why do we not know the answer to these questions?)

I wonder, did the request for a PERA study actually come from the Colorado General Assembly?  Was this request the product of SB 10-001 co-prime sponsor Senator Josh Penry’s mind?  Did he conceive this idea to request PERA recommendations?  Or, was this idea planted in the Penry brain by PERA’s lobbyists?

After all, if you intend make extreme recommendations . . . that the State of Colorado, and PERA-affiliated employers breach their contractual pension obligations, would it not be useful to later claim that the state Legislature requested that bold recommendations be made?  

That such recommendations should be sufficiently extreme to restore the PERA trust funds to a 100 percent actuarial funded ratio?  (In spite of the fact that the PERA Trust Funds had visited this lofty 100 percent perch only twice in its 81-year history?  And, that the PERA Board had historically sought to cap the PERA Trust Fund AFR at a 90 percent level?)

Would that not provide useful cover?  “They told us to make the recommendation!”  

Where was the scheme to breach PERA contracts actually born?  Will we ever know?

Does the genesis of SB 10-001’s COLA theft provisions lie in the minds of a pension administrator?  Or, in the hopeful heart of a self-interested lobbyist?

Did the PERA Board of Trustees conceive the idea to take contracted COLA benefits?  If so, which PERA board member gets the credit?  Or, was the idea to breach pension COLA contractual obligations brought to the PERA Board by an outside organization?  A public sector union lobbyist perhaps?

Well, it should be possible to discover the answer.

In 2009, the Colorado General Assembly enacted legislation (SB 09-282) to merge Denver Public Schools with Colorado PERA (specifically, to merge the assets and liabilities of Denver Public Schools into Colorado PERA.)

A provision of SB 09-282 required that the PERA Board of Trustees submit recommendations to the Colorado General Assembly regarding methods of responding to the decrease in the value of the association’s assets on or before November 1, 2009.  

Here’s the language in the bill:

24-51-211, C.R.S.  (2) ON OR BEFORE NOVEMBER 1, 2009, THE BOARD SHALL SUBMIT SPECIFIC, COMPREHENSIVE RECOMMENDATIONS TO THE GENERAL ASSEMBLY REGARDING POSSIBLE METHODS TO RESPOND TO THE DECREASE IN THE VALUE OF THE ASSOCIATION’S ASSETS, INCLUDING REAL ESTATE, PRIVATE EQUITY, AND OTHER INVESTMENTS, TO DECREASE THE AMORTIZATION PERIOD OF EACH DIVISION OF THE ASSOCIATION AND TO ENSURE THAT EACH DIVISION OF THE ASSOCIATION WILL BECOME AND REMAIN FULLY FUNDED.

Note that this language asks for “possible methods” to respond to the decrease in the value of PERA’s assets.  The General Assembly did not ask that the PERA Board dictate a plan that would breach PERA’s contractual pension obligations.  Implicit in the request from the General Assembly was the fact that the requested “possible methods” would be constitutional.

On April 21, 2009, Senator Penry, the co-prime sponsor of SB 10-001 amended SB 09-282 on the floor of the Senate.

His prepared amendment to the bill required the PERA Board to make recommendations to the Legislature regarding “possible methods” to respond to the decrease in the value of PERA’s assets.  His amendment required that this report be provided to the Legislature by September 1, 2009.  Two days later, Senator Sandoval amended the bill (SB 09-282) to move the deadline for submission of the report from September 1, 2009 to November 1, 2009.  (The PERA Board wanted more time?  It looks like the PERA Board may claim some ownership in the statutory language requiring the “study.”)

Questions for Senator Penry: Did you originate the idea to require the PERA Board to make recommendations to the General Assembly regarding possible methods to respond to the decrease in PERA assets of your own accord?  Or, did you offer this amendment on behalf of a PERA lobbyist?  Another lobbyist?  Another legislative member?

The drafter of SB 09-282 was a lawyer from the General Assembly’s Office of Legislative Legal Services.  Her name is Nicole Myers.  

Questions for Ms. Myers:  Who asked you to draft the amendment requesting that the General Assembly make recommendations regarding methods to respond to the decrease in PERA assets?  A lobbyist?  A PERA lobbyist?  Did a PERA lobbyist make this request on behalf of Senator Penry?  Did a PERA lobbyist provide a draft of their desired language in this regard?  Please check your records.

It would be interesting if, after years of emphasizing that the Colorado General Assembly requested that the PERA Board of Trustees make recommendations to address the decrease in PERA assets, it turned out that it was in fact PERA’s lobbyists who actually put this language into SB 09-282.  It would be interesting to learn if this language was placed in SB 09-282 in order to provide cover for a premeditated attempt to breach PERA retiree contracts.

Questions for Senator Sandoval:  Did you decide to move the deadline for the PERA Board to report out by two months of your own accord?  Or, was this a request from Colorado PERA lobbyists?  

It would be worth listening to the recordings of hearings on SB 09-282 by the House and Senate Finance committees.  (For that matter, it would be worth listening to all of the committee discussion from 2009 on PERA bills adopted or postponed indefinitely that year.)

Here are a few excerpts from a summary of the Senate Finance Committee hearing on SB 09-282 on April 14, 2009:

“03:28 PM

Mr. Williams responded to questions about the contribution rates for the retirement plans.  He stated that the PERA Board is committed to presenting a proposal to the General Assembly that addresses retirement benefit issues for Colorado PERA.”

“05:20 PM

Ms. Kennedy continued discussing the timing of when to bring the DPS system into PERA’s plan.  She also responded to questions about the management of the current pension systems and retirement benefits.  Discussion ensued about solvency issues.”

This fact jumps out:

On April 14 at 3:28 PM, Meredith Williams (Colorado PERA’s Executive Director at the time) testified to the Senate Finance Committee that “the PERA Board is committed to presenting a proposal to the General Assembly that addresses retirement benefit issues for Colorado PERA.”

Meredith Williams made this statement one week BEFORE the requirement to report to the General Assembly was even in the bill.

That requirement was placed in the bill on the Senate floor one week after Meredith William’s testimony (on April 21, 2009.)

I suppose that listening to the tape of this bill hearing before the Senate Finance Committee on April 14, 2009 might provide some insights.

Alternatively, we could put the question to Senator Penry, or bill drafter Nicole Myers, or Senator Sandoval.

Premeditated?