Saturday, July 02, 2011

They’re Coming For Your Pension

They’re Coming For Your Pension

by John Cole

I simply don’t understand how this is legal:

Judges in Colorado and Minnesota have dismissed court challenges by retired public workers whose pensions had been cut — developments that may embolden other states and cities to use pension reductions as a tool to help balance their budgets.

The two lawsuits sought to reverse reductions in the cost-of-living adjustments that Colorado and Minnesota had previously promised to retired public workers. Generally speaking, once lawmakers have agreed to provide certain pension benefits to public workers, it is difficult, if not impossible, to roll them back because of protective language in state laws and constitutions and years of court interpretations.

Public pensions are considered so bulletproof that when the city of Vallejo, Calif., recently restructured its finances in bankruptcy, it cut other costs but left worker pensions intact.

The two court decisions, issued Wednesday, suggest that the legal tide may be changing for public pensioners. The political tide has already turned in some places — in addition to Colorado and Minnesota, South Dakota and New Jersey have also cut cost-of-living benefits for current retirees, and other states have been awaiting legal guidance before doing the same.

In their court filings, retirees in Colorado and Minnesota had argued that their benefits were contractual in nature, and therefore protected by state and federal constitutional language barring the impairment of contracts.

However, in his ruling dismissing the Minnesota case, Judge Gregg E. Johnson of the state’s Second Judicial District Court wrote that the retirees in that state “have not met their burden to show unconstitutionality beyond a reasonable doubt.”

Look, I am very sensitive to the argument that some of the pensions promised to people were unreasonable- we have all heard the stories of people retiring at 50 and drawing ridiculous pensions for 20-30 years. The solution to that, though, is to not make those promises to current and new workers. But it is simply beyond my understanding how you can agree to a contract, the worker defers salary and income for the promise of a pension that both parties agree upon, and then, after the worker has fulfilled his end of the bargain, you simply say “Fuck it, your pension costs too much and we can’t get our house in order and our Galtian overlords don’t want to pay taxes. Eat a bag of dicks, old man.” Because that is what is happening.

What are these retirees, who made financial decisions their entire lives, supposed to do? If you thought for 40 years as you worked that you had X amount of money coming in retirement, it would substantially change your investment strategy and portfolio. You can’t recover when the government just yanks it all away. You don’t get a do-over to go back and invest more.

This is just insane.

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July 1, 2011 9:19 am Posted in: Assholes, Free Markets Solve Everything, Fuck The Middle-Class, Glibertarianism  142 Comments

Public workers either contributed to their pensions and/or took lower pay than their private peers in order to receive retirement security in the form of pensions. For the governments to turn around and cut or default on those pensions after the fact is nothing less than grand theft on a galactic scale. It has to be illegal and if the courts allow it then it is revealed just how corrupt and unjust this once great nation has become.

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