[GoodLife]

The United States Court of Appeals for the First Circuit gave us an interesting glimpse of the future last week when it ruled on an obscure case involving government pension obligations.

Ever since the mid-1990s, police officers and fire fighters in the town of Cranston, Rhode Island had been promised state pension benefits upon retirement.

But, facing critical budget shortfalls over the last several years that the Rhode Island government called “fiscal peril,” the state legislature voted to unilaterally reduce public employees’ pension benefits.

Even more, these cuts were retroactive, i.e. they didn’t just apply to new employees.
The changes were applied across the board; workers who had spent their entire careers being promised certain retirement benefits ended up having their pensions cut as well.

Even the court acknowledged that these changes “substantially reduced the value of public employee pensions provided by the Rhode Island system.”

So, naturally, a number of municipal employee unions sued.
And the case of Cranston’s police and fire fighter unions made it all the way to federal court.

The unions’ argument was that the government of Rhode Island was contractually bound to pay benefits– these benefits had been enshrined in long-standing state legislation, and they should be enforced just like any other contract.

The state government disagreed.
In their view, the legislature should be able to change laws, even retroactively, whenever it suits them.

Last week the First Circuit Court issued a final ruling and sided with the state of Rhode Island: the government has no obligation to honor its promises.

Here is First Circuit Court ruling:

http://media.ca1.uscourts.gov/pdf.op...-1293P-01A.pdf

[8notes]

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[Allegiance]

Originally Posted by GoodLife

Both of you need to stay on topic, this post is about a ruling on pensions, not welfare.

My understanding NY State voters just voted no to constitutional convention which will bar them from making changes for 20 years.

Are you telling me these new court decisions will give NY State politicians the power to make these changes at will?

If you think this is not political you are wrong.

If states waste money or are burdened with federal mandates to have more social programs, for legals and illegals, they will find that money in our pensions.

It's very political.

[8notes]

Sorry, I can't help myself when I see people posting incorrect information, especially when it is in the form of political rhetoric.

[GoodLife]

Originally Posted by Allegiance

My understanding NY State voters just voted no to constitutional convention which will bar them from making changes for 20 years.

Are you telling me these new court decisions will give NY State politicians the power to make these changes at will?

If you think this is not political you are wrong.

If states waste money or are burdened with federal mandates to have more social programs, for legals and illegals, they will find that money in our pensions.

It's very political.

What the First Circuit Court said (not me) in their ruling is that basically yes, what the State giveth the State can take away. We will see more of this as many States are in dire fiscal straights.

[My Post]

So as to the original post, were these gold plated, insane pensions like we saw in California? Where they had something in there that they had to be the highest paid people in the country or whatever? I would like to see the exact numbers.

[GoodLife]

Originally Posted by My Post

So as to the original post, were these gold plated, insane pensions like we saw in California? Where they had something in there that they had to be the highest paid people in the country or whatever? I would like to see the exact numbers.

Pensions: Cranston Loses, Here's Why | Turn Out Blog

Cranston Police & Fire Pensions 80% More Generous than MERS Peers - RI Center for Freedom and Prosperity

Disability pensions run heavy in Cranston - News - providencejournal.com - Providence, RI

Many of these cases develop because of over-generous benefits, poor judgement, incorrect assumptions and plain old greed.
Guaranteed ways to screw it up:

Allow overly optimistic forecasts on investment returns or asset valuations so you can pass an enhancement.
Cut deals with elected officials and administrators to allow municipalities to skip required payments to the system because of rosy returns or fund balances. (San Diego)
Allow average final compensation to include overtime pay, vacation pay, known as pension spiking. (New York)
Lock in an absurd mandatory interest rate due on investment earnings in a deferred retirement plan. (Dallas)
Allow frivolous service-connected disability retirements which bleed the system dry. (Fairfax pre-1996)
Have a pension board agreeing to knowingly risky or even absurd investments. (Dallas)