My parents don’t often let me drink soda, but I like to think of myself as a Coca-Cola guy. Pepsi just doesn’t quite do it for me. And don’t even get me started on the off-brand colas. Big K Cola? Yuck!
I have to admit, though, that I haven’t yet tasted this PERA COLA thing I’ve heard so much about. Maybe that’s for the best; judging by some of the reactions I’ve seen to yesterday’s Colorado Supreme Court ruling on the issue, I’m thinking I’d probably find it a bit too heavy.
I wrapped up last week’s policy adventures by writing about Colorado’s Public Employees Retirement Association (PERA), which provides pensions for many Colorado’s public school teachers (roughly and a large number of other public employees in the state. In that post, I briefly mentioned a 2010 bill that aimed at partially correcting one of PERA’s biggest problems: Unfunded liabilities.
While that bill was a small—perhaps inadequately small—step in the right direction for Colorado, it required some tough changes to be made. Among those changes was a reduction in annual cost-of-living (COLA) adjustments for those covered by PERA’s pensions—including the more than 100,000 retirees who are already receiving benefits. More specifically, the bill cut yearly COLA increases from 3.5 percent to 2 percent or inflation, whichever happens to be lower.
As you may have guessed, this move made some folks rather unhappy. A lawsuit was filed, legal battles were fought, and the case eventually wound up in front of the Colorado Supreme Court. The question: Does the 3.5 percent yearly COLA increase represent a contractual, constitutionally protected obligation for PERA? According to the Court, the answer is no. Continue Reading »