The suit challenges the cancellation, which affected about 109,000 members of the Public Employees Retirement System Plan 1 and Teachers Retirement System Plan 1. Eliminating the COLAs saved the state about $400 million in pension contributions this biennium alone – and cut unfunded liabilities by $7 billion over 25 years.
The union alleges, in court papers filed in Thurston County Superior Court, that the legislation is illegal and rewrites benefits promised to retirees in PERS 1 and TRS 1 and to plan members who have not yet retired.
“It says that what the state is trying to do is unconstitutional and violates the due process and contractual rights,’’ the federation’s lawyer, Olympia attorney Ed Younglove, said.
Spokesman Dave Nelsen of the Department of Retirement Systems, which is named in the suit, declined to comment. “It is a legal matter; we’ll address it in court,’’ Nelsen said.
The last automatic COLA in 2010 was worth about $56.40 per month for retirees who worked 30 or more years, or $676.80 a year.
Budget writers in the Legislature and governor’s budget office have said they believe the repeal can pass legal muster, because the automatic COLA was authorized in a 1995 law that reserved the Legislature’s right to stop the adjustments.
Younglove said that language won’t work and flies in the face of pension laws. He said the state also did not adequately warn retirees or workers that the benefits might be taken away.
Two similar lawsuits are in the works from other affected retiree groups, including the Retired Public Employees Council of Washington. RPEC’s board voted Monday to file suit and retained a Seattle lawyer for that purpose, interim executive director George Masten said.
The other suit is expected from the Washington Education Association, which represents teachers.
RPEC contends that the language giving the state the right to repeal pay raises is the same that was used in a gain-sharing program that was later repealed. A King County judge has ruled that the reservation of rights in the gain-sharing law – which was a short-lived program to share the state’s exceptional investment returns on pensions with retirees – did not pass muster.
Besides freezing COLAs, HB 2021 also raised the minimum benefit for older retirees, if they met certain requirements for years of service and years in retirement.
Brad Shannon: 360-753-1688
bshannon@theolympian.com
www.theolympian.com/politicsblog
