Court Upholds Smaller Increases For PERA Retirees
DENVER (AP) - Retired workers covered by Colorado's pension system are not entitled to fixed cost-of-living increases, the Colorado Supreme Court ruled Monday.
The ruling upheld a change in annual increases for Public Employment Retirement Association, or PERA, members approved by lawmakers in 2010 in response to the recession and the system's underfunding. Retirees challenged the change in court, arguing that they have a contractual right to the increases.
PERA retirees used to get 3.5 percent annual increases. However under the bipartisan law passed in 2010, retirees got no cost of living increase that year to save the state about $80 million. Future annual increases were also capped 2 percent.
The law also raised the retirement age to 60 and increased contributions for both employees and the government.
The Supreme Court found that retirees' cost-of-living increases, as opposed to their vested pension amount, have always been subject to change. The ruling overturned a Colorado Court of Appeals ruling in favor of the retirees.
In a statement, Attorney General John Suthers said he was glad the court agreed that the legislature needs to be able to make changes to the system if economic conditions require it.
"The law in question was an important part of ensuring that PERA remains there for state retirees long into the future. As we argued to the Court, upholding the law helps protect both current and future retirees, and the state's taxpayers," he said.
The system covers about 512,000 people, including state workers, teachers and local government employees.
