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    • Algernon Moncrief
      COLORADO PERA ATTEMPTS TO DECEIVE THE COLORADO SUPREME COURT. Both the plaintiffs and the defendants in the Colorado public pension case, Justus v. State, have appealed to the Colorado Supreme Court. To recap, in 2010, the Colorado Legislature breached its contracts for pension COLA benefits owed to retired, long-time employees . . . the retired employees immediately sued. In 2011, a lower court determined that the retired employees did not have a contractual right to their pension COLA benefits . . . the retired employees immediately appealed this ruling to the Colorado Court of Appeals. In 2012, the Colorado Court of Appeals read Colorado pension case law, and determined that the retired employees (as they had been told for 30 years) did indeed have a contractual right to their pension COLA benefits, but that the lower court should apply a test to determine if it was acceptable for the State to seize their property. Thus, we arrive at the present, with the State of Colorado and its pension-administering arm (Colorado PERA) still seeking to breach contracts with long-time retired employees, and the retired employees unwilling to lie down quietly for a fleecing. These retired employees want the Colorado Supreme Court to decide that they have a contractual right to their pension COLA benefit, and that under Colorado law, this right is independent of any test for acceptable state seizure of their contracted pension benefits that may be applied. The State of Colorado and Colorado PERA liked the lower court ruling, that retirees have no contractual right to the pension COLA (even though, unfortunately for their case PERA has put it in writing that the retirees do have such a contractual right.) Both sides have appealed to the Colorado Supreme Court. In this article, I will expose what are, in my opinion, deliberate attempts on the part of this pension administrator, Colorado PERA, to deceive the Colorado Supreme Court. Colorado PERA is an organization that boasts about its “transparency.” Having read Colorado PERA’s submission to the Colorado Supreme Court in the case Justus v. State, I am ready to concede that Colorado PERA has achieved a measure of “transparency.” While reading PERA’s brief submitted to the Colorado Supreme Court I was impressed by the “transparency” of PERA’s deception. (I’ll address what I believe are deceptions included in the Colorado PERA Supreme Court Brief later in this article, but first, a look at the Colorado Supreme Court’s rules relating to candor.) After I put down the Colorado PERA Supreme Court Brief, I picked up a copy of the Colorado Supreme Court’s Rules of Professional Conduct and read about the duty of candor before the court. Here’s a link to the Colorado Supreme Court Rules of Professional Conduct: Admittedly, I am a layperson, so I have no idea of what constitutes acceptable tactics in civil litigation. And, we should not forget that all attorneys have an obligation to “zealously” defend the interests of their clients. However, without drawing any firm conclusions, read a few of the excerpts that I have taken from the Colorado Supreme Court Rules below, and see if you do not agree me that Colorado PERA is walking very close to the ethical line. From the Colorado Supreme Court Rules of Professional Conduct: “An advocate (attorney) is responsible for pleadings and other documents prepared for litigation, but is usually not required to have personal knowledge of matters asserted therein, for litigation documents ordinarily present assertions by the client, or by someone on the client’s behalf, and not assertions by the lawyer.” (My comment: My interpretation of this Colorado Supreme Court rule relating to candor of attorneys is that it is the responsibility of the client [here, Colorado PERA] to be forthright in providing information to the attorney. In my opinion, Colorado PERA is attempting to deceive the Colorado Supreme Court. Accordingly, I hold Colorado PERA entirely responsible for the deception I perceive in their Supreme Court Brief, and find no fault with the attorneys PERA has also deceived. Actually, I feel a bit sorry for the attorneys. What were all those years in school for? To try and break clear contractual rights of old people?) More from the Rules of Professional Conduct: “There are circumstances where failure to make a disclosure is the equivalent of an affirmative misrepresentation.” “A lawyer shall not knowingly: (3) offer evidence that the lawyer knows to be false. If a lawyer, the lawyer’s client, or witness called by the lawyer has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal.” (My comment: I have covered Colorado PERA’s attempts at deception through the use of statistics, in particular the “market-based” pension funded ratio . . . ad nauseam. But, PERA has high hopes for this line of deceit and stubbornly refuses to give it up. I don’t believe that the “market-based” funded ratio that Colorado PERA uses in its Supreme Court Brief is “false.” ‘Market-based’ funded ratios are one measure of the fiscal soundness of public pensions. However; in my opinion Colorado PERA uses this “market-based” funded ratio in the Supreme Court Brief in attempt to mislead the Colorado Supreme Court. I do think this is a ridiculous and sophomoric tactic, since the Colorado Supreme Court will surely discover the attempt to deceive. Colorado PERA uses the “market-based” funded ratio in its Supreme Court Brief to exaggerate the financial condition of the PERA trust funds with hopes of bolstering its case to breach pensioner contracts. Colorado PERA fails to identify the funded ratio it cites a number of times in its Colorado Supreme Court Brief as a “market-based” funded ratio, and thus, I believe intends to deceive the court. PERA intends to deceive the Supreme Court by failing to inform the court that the funded ratios used in the legislation subject to court scrutiny (SB 10-001) are “actuarial funded ratios (AFR),” and that AFRs have traditionally been used by Colorado PERA to measure the funded status of the PERA trust funds. PERA has almost exclusively used AFRs in the past. It is only at the beginning of the PERA campaign to breach pensioner contracts that PERA began using “market-based” funded ratios. The funded ratio in the title of the bill, SB 10-001 is an actuarial funded ratio. I return to “market-based” funded ratios at the end of this article.) More from the Rules of Professional Conduct: “This Rule sets forth the special duties of lawyers as officers of the court to avoid conduct that undermines the integrity of the adjudicative process.” “. . . the lawyer must not allow the tribunal to be misled by false statements of law or fact or evidence that the lawyer knows to be false.” “A lawyer acting as an advocate in an adjudicative proceeding has an obligation to present the client’s case with persuasive force.” “Paragraph (a)(3) requires that the lawyer refuse to offer evidence that the lawyer knows to be false, regardless of the client’s wishes. This duty is premised on the lawyer’s obligation as an officer of the court to prevent the trier of fact from being misled by false evidence.” “The prohibition against offering false evidence only applies if the lawyer knows that the evidence is false.” “Thus, although a lawyer should resolve doubts about the veracity of testimony or other evidence in favor of the client, the lawyer cannot ignore an obvious falsehood.” “Although paragraph (a)(3) only prohibits a lawyer from offering evidence the lawyer knows to be false, it permits the lawyer to refuse to offer testimony or other proof that the lawyer reasonably believes is false. Offering such proof may reflect adversely on the lawyer’s ability to discriminate in the quality of evidence and thus impair the lawyer’s effectiveness as an advocate.” “But the alternative is that the lawyer cooperates in deceiving the court, thereby subverting the truth-finding process which the adversary system is designed to implement.” “Fair competition in the adversary system is secured by prohibitions against destruction or concealment of evidence . . .” Now . . . let’s take a look at the new Colorado PERA Brief submitted to the Colorado Supreme Court. COLORADO PERA’S SUPREME COURT BRIEF – AN ATTEMPT TO SUBVERT THE COLORADO SUPREME COURT’S “TRUTH-FINDING PROCESS.” Sadly, Colorado PERA repeats many of the same deceptions in its Supreme Court Brief that have been included in earlier briefs it has submitted to the Denver District Court and the Colorado Court of Appeals. (What is it with deception in legal briefs? Is this standard operating procedure? I am amazed!) Below I provide what I believe are significant excerpts from the Colorado PERA Supreme Court Brief and my comments on those excerpts. From the Colorado PERA Supreme Court Brief: “The decision also has wider implications on the legislature and the State: the creation of enforceable public contracts by statute despite the intent and historical practice of the legislature and the reasonable expectations of the parties.” “Plaintiffs could have no reasonable expectation that ever-changing COLA formulas would freeze, for the first time, when they retired.” (My comment: PERA attorneys, EVEN YOUR CLIENT HAS THESE EXPECTATIONS . . . THAT THE COLA BENEFIT IS AN ENFORCEABLE PUBLIC CONTRACT! If Colorado PERA, your client, has these expectations, why should PERA pensioners not also have these expectations? PERA attorneys, please take a minute to read the words of your client provided in testimony to the General Assembly’s Joint Budget Committee. Your client put it in writing that PERA pensioners have a contractual right to their COLA benefits. Colorado PERA believes that pensioners have such a contractual right . . . that belief goes beyond a “reasonable expectation.” Colorado PERA in a written document, to the Colorado General Assembly’s Joint Budget Committee on December 16, 2009 states that the PERA COLA benefit IS a contractual obligation of PERA, “The General Assembly cannot decrease the COLA (absent actuarial necessity) because it is part of the contractual obligations that accrue under a pension plan protected under the Colorado Constitution Article II, Section 11 and the United States Constitution Article 1, Section 10 for vested contractual rights.” Link: From the Colorado PERA Supreme Court Brief: “But this mandatory language bound the PERA administrator while the statutes were in effect-not future legislatures.” (My comment: Heads up PERA attorneys, as noted above, the “PERA administrator” you refer to here has testified to the Colorado General Assembly [and helpfully reduced this testimony to writing] that PERA’s pension COLA benefits ARE INDEED a contractual obligation. PERA attorneys, your client doesn’t believe your argument that the statutes only bind the “pension administrator.” Your client wrote that the General Assembly cannot decrease the contracted COLA . . . THAT THE GENERAL ASSEMBLY IS BOUND, not the pension administrator. Did this not come up in your meetings with your client? Your client’s testimony is on the record, it has been recorded at the Legislature. It is not going to simply disappear.) From the Colorado PERA Supreme Court Brief: “The General Assembly considered readjusting the COLA for retirees as the last option, only after it became evident that no other viable contribution and benefit changes could prevent the pension fund from running out of money.” (My comment: As you know, I believe that the General Assembly reduced the contracted PERA COLA benefit from retirees [thus breaching pensioner contracts] as a FIRST OPTION. I believe that the General Assembly created a façade of deliberation to mask a predetermined attempt to breach the PERA pension COLA contractual obligation. Colorado PERA contends that “no other viable contribution and benefit changes” were available. In reality, no other POLITICALLY viable contribution and benefit changes were available. Colorado PERA left the determination of the pension breach strategy to the 17-member PERA Contract Breach Lobbying Troop. Here at, dozens of viable “less drastic” alternatives to pension contract breach have been documented. Numerous states have demonstrated for Colorado PERA the path to legal, prospective pension reform. These options were ignored by Colorado PERA and the General Assembly.) From the Colorado PERA Supreme Court Brief: “The (District) court held: ‘While Plaintiffs unarguably have a contractual right to their PERA pension itself . . .’ (My comment: As I noted last year, I am curious as to how the Denver District Court arrived at this conclusion that “plaintiffs unarguably have a contractual right to their PERA pension itself” without citing either the McPhail or Bills cases in its decision? On what authority did the Denver District Court base this determination? Was it pulled out of thin air?) In the Colorado PERA Supreme Court Brief, PERA’s attorneys write in regard to the pension cases McPhail and Bills: “Those dated cases are distinguishable.” (My comment: Let’s get this straight for the record: Colorado PERA’s attorneys believe that the Colorado Supreme Court decisions in McPhail and Bills that address the contractual nature [under the COLORADO constitution’s Contract Clause] of post-retirement benefit increases for retired public employees who have vested rights in Colorado public pensions are “distinguishable,” and that the Supreme Court should not rely on their own authority. Instead, Colorado PERA’s attorneys argue that the Colorado Supreme Court should rely on a case [DeWitt] that addressed a “statutory revocation of a testator’s former wife’s interest in a life insurance policy” based on FEDERAL Contract Clause authority, a case in no manner involving “vested rights to employee benefits,” a case concerning the “retroactive application of a Uniform Probate Code provision which automatically revoked the designation of a divorced spouse as a life insurance beneficiary.” Got it?) From the Colorado PERA Supreme Court Brief: “The result is contrary to legal precedent governing the legislature's formation of public contracts with private individuals, and has far reaching implications because it binds the hands of this and all future legislatures which, under the court of appeals' decision, are now bound by a contract the legislature did not intend to enter.” (My comment: The Court of Appeals ruling is not contrary to legal precedent. As noted earlier in the PERA Colorado Supreme Court Brief, Colorado pension precedents have existed for more than fifty years . . . McPhail and Bills. The Colorado General Assembly has been aware of this pension precedent for half a century. The General Assembly has known for decades that public pension benefits are its contractual obligations. Thus, the General Assembly has for decades amended the PERA statutes in a careful manner that does not impair its PERA pensioner contracts. For fifty years, the General Assembly has known of its contractual pension obligations. The General Assembly has adopted legal, prospective PERA pension reforms in the past to diminish its pension unfunded liabilities. If the General Assembly wanted to further diminish its contractual pension obligations, it had the opportunity to do so through the adoption of additional legal, prospective pension reforms over all of these decades.) From the Colorado Court of Appeals Decision: Plaintiffs are Not Claiming an UNCHANGEABLE COLA — Plaintiffs are Claiming an IRREDUCIBLE COLA. This concept is obviously difficult for Colorado PERA administrators to grasp. It was not difficult for the Colorado Court of Appeals. From the Colorado Court of Appeals Decision: “We note, however, that plaintiffs contend that they have a reasonable expectation of an irreducible (not, as defendants assert, an unchangeable) COLA. Therefore, we direct the district court to consider whether there has been a substantial impairment with that in mind.” Here are a few examples of PERA’s ongoing deception in this regard . . . now infecting its Brief submitted to the Colorado Supreme Court: “The legislature had previously readjusted the COLA formula for PERA retirees ten times in forty years . . .”, “retiree COLAs would once again require readjustment.”, “ . . . the General Assembly had changed COLAs ten times and DPSRS had changed COLAs twelve times during the decades preceding 2010.”, “There cannot be entitlement to something no Plaintiff ever received: a COLA frozen for life at the rate that happened to be in effect when each became eligible to retire or retired.” (My comment: I find this PERA red herring [the “COLAs as unchangeable” tactic of deception] quite tedious. Clearly, what is “unchangeable” is this PERA tactic of deception itself. Since the commencement of litigation in Justus v, State, Colorado PERA has relentlessly argued that the plaintiffs in the case Justus v, State object to “changes,” or “adjustments” in the rate of their contracted COLA, or that they seek a “frozen” COLA. Plaintiffs DO NOT object to “changes,” or “adjustments” in the COLA rate, they object to retroactive, unconstitutional “reductions” in the COLA rate. Plaintiffs object to the taking of their property — their contracted pension COLA benefits by the State. [Obviously, improving PERA retiree COLA benefits would not breach retiree pension contracts . . . the retirees would not be harmed if their pension benefits were increased.] Instead of acknowledging up front that the plaintiffs in the case Justus v. State were contesting the provisions of SB 10-001 that REDUCED the PERA retiree COLA benefit, the defendants in the case [PERA and the State of Colorado] have employed this “red herring,” claiming that the plaintiffs were arguing that the COLA benefit could not be legally “adjusted,” that it was UNCHANGEABLE. The Colorado Court of Appeals, in their Decision, saw through this PERA red herring. In reversing the Denver District Court decision, the Colorado Court of Appeals specifically ordered the lower court to ignore PERA’s attempted deception. It is astonishing, but Colorado PERA still will not give up this particular line of deception.) From the Colorado PERA Supreme Court Brief: “One of the ‘gravest duties impressed upon the courts’ is declaring legislation unconstitutional, which is why the presumption of constitutionality is so strong.” (My comment: States do not receive much deference in the courts when they are trying to break their own contracts — trying to escape their own financial obligations. From the Madiar article in the ABA Law Journal that we looked at a few weeks ago: “In 1977, however, the (U.S.) Supreme Court clarified that state attempts to impair their own contracts, ESPECIALLY FINANCIAL OBLIGATIONS, were subject to greater scrutiny and very little deference because the STATE’S SELF-INTEREST IS AT STAKE. As the court bluntly stated: A governmental entity can always find a use for extra money, especially when taxes do not have to be raised. If a state could reduce its financial obligations whenever it wanted to spend the money for what it regarded as an important public purpose, the Contract Clause would provide no protection at all . . . Thus, a state cannot refuse to meet its legitimate financial obligations simply because it would prefer to spend the money to promote the public good rather than the private welfare of its creditors.”) From the Colorado PERA Supreme Court Brief: “The General Assembly, after extensive actuarial studies and input from retirees . . .” (My comment: This “input from retirees” included “input” that the provisions of SB 10-001 were unconstitutional.) From the Colorado PERA Supreme Court Brief: “It made ‘modifications to the public employees' retirement association necessary to reach a one hundred percent funded ratio within the next thirty years.’" (My comment: As we have seen, Colorado PERA has had an internal board policy in the past to cap the PERA trust funds at a 90 percent funded ratio. Thus, when Colorado PERA’s 17-member lobbying troop put this “100 percent funded ratio” threshold into SB 10-001, they codified the hypocrisy of the PERA Board of Trustees. Also, we know that Fitch Ratings, one of the three large ratings firms in the United States, considers public pension funds to be “well-funded” at an 80 percent actuarial funded ratio. We also know that according to the Federal Reserve, public pension actuarial funded ratios in the 50 to 60 percent range were typical in the 1970s and yet pension contractual rights were, nevertheless, upheld by U.S. courts.) From the Colorado PERA Supreme Court Brief: “This broad new view of government contracting could affect other types of government legislation and create other unintended private contractual rights.” (My comment: This is not a “broad new view of government contracting.” Public pension rights have been considered to be contractual obligations for nearly a century. PERA attorneys, for your edification, Professor Amy Monahan writes: “The legal protection of public pensions has undergone significant change in the last century. Historically, public pensions in this country were viewed as mere gratuities that could be withdrawn or amended by the state at any time. Unsatisfied with a legal rule that allowed states to freely abrogate pension obligations, the vast majority of states have rejected the gratuity theory and instead protect public pensions under contract or property rights theories.” Link: From the Colorado PERA Supreme Court Brief: “Current and future employees will pay the highest rates in PERA' s history while working up to a decade longer before retirement.” (My comment: This Colorado PERA assertion in its Supreme Court Brief is also designed to mislead the court. Under SB 10-001, age and service requirements for PERA retirement eligibility were NOT altered for current vested employees. Age and service requirements were extended for future hires [notably, those to whom Colorado PERA has no contractual obligations]. Current PERA members will work not one day longer before retirement under the provisions of SB 10-001. The addition of time to the age and service retirement eligibility requirements of current employees [although of questionable constitutionality] is clearly “less drastic” than the intentional breach of PERA pensioner contracts.) From the Colorado PERA Supreme Court Brief: “The need for review and deference to the General Assembly is particularly acute where, as here, invalidating the statute would threaten not just legislative autonomy but also the fiscal stability of a multibillion dollar state retirement program.” (My comment: Colorado PERA’s attorneys have it backwards. The fiscal stability of the PERA trust funds is not threatened by courts upholding the rule of law in the United States. The fiscal stability of the PERA trust funds is threatened by PERA-affiliated employers that skip their annual required contributions to the pension, by a PERA Board of Trustees that fails to emphatically and regularly implore the General Assembly to meet pension obligations, by a PERA board that historically intended to underfund the PERA pension by ten percent, by politicians that have used the PERA pension trust funds as a “credit card,” historically skipping needed contributions to meet contractual obligations in order to make discretionary expenditures, by politicians who have irresponsibly slashed the state’s available revenues, and by politicians who have directed state resources to pay local government pension obligations that are not the responsibility of the State of Colorado.) From the Colorado PERA Supreme Court Brief: “Even with ambitious 8.5% returns, the state division would run out of money in 21 years and the school division would run out in 25 years.” (My comment: PERA’s divisions will not “run out of money” if the State of Colorado and other PERA-affiliated employers begin paying the annual required contributions that they have skipped for the last decade. Also helpful would be the adoption of legal, prospective pension reform by the General Assembly, and appointment of a commission to examine additional revenue sources that could be directed to the PERA trust funds. If the General Assembly acts responsibly, a future in which payments to PERA pensioners are taken directly from state general funds can be avoided. The General Assembly is already making payments for pension obligations [those of local governments] directly from its general funds.) In regard to the Opinion of the Colorado Court of Appeals, PERA’s attorneys write in the PERA Supreme Court Brief: “The court nonetheless ignored the statutory language and did not consider repeated COLA changes, including ones made during Plaintiffs' retirements.” (My comment: If anything, I desire to be a helpful layperson. So, I’m going to help PERA’s attorneys find the language they’re looking for in the Colorado Court of Appeals Decision. First, the consideration of “repeated COLA changes” in the Court of Appeals Decision — it’s hidden on pages #3 through #12. Second, consideration of “the statutory language” is on pages 27 and 28 of the Court of Appeals Decision. Attorneys, for your convenience, I have excerpted this material and present it below. From pages 27 and 28 of the Colorado Court of Appeals Decision: “Nonetheless, defendants attempt to distinguish McPhail and Bills by pointing out that the city charter provision at issue in those cases said that retirees ‘shall be entitled to an increase in the amount of their pension’ of a particular amount.’” “True, the statutes at issue here do not use the word ‘entitled.’ But that makes no difference, for two reasons. First, the court in McPhail and Bills did not mention the charter language in its analysis. Instead, the court found a contractual right based on members’ provision of services and contributions to the retirement fund.” “Second, the language in the statutes here is similar to that at issue in McPhail and Bills.”) From the Colorado PERA Supreme Court Brief: “Plaintiffs not only ignore the extensive legislative record, but also the unanimous support from unions and retiree organizations . . .” (My comment: Far from “ignoring the extensive legislative record,” plaintiffs with their limited resources [no pension trust funds to raid for this purpose you know] have scrutinized the legislative record and have observed a Colorado General Assembly that has, through its mismanagement and neglect, created a mess. Now this Colorado General Assembly, irresponsibly and illegally, wants to push this mess off onto a bunch of elderly pensioners. As to “unanimous support from retiree organizations,” I want to point out that SavePERACOLA IS a retiree organization. Indeed, SavePERACOLA is a retiree organization that informed the General Assembly at the outset that its proposed actions were unconstitutional.) Colorado Court of Appeals: The Minnesota and South Dakota Cases Have No Relevance to the case Justus v. State. From the Colorado PERA Supreme Court Brief: “Plaintiffs, through counsel who filed similar (since-rejected) lawsuits in Minnesota and South Dakota . . . “ (My comment: The Colorado Court of Appeals found that the defendants [Colorado PERA and the state] erred in their reliance on recent court decisions relating to COLA benefits in Minnesota and South Dakota. The Court of Appeals determined that these two cases have no relevance to the case Justus v. State [the cases are “distinguishable.”] The Colorado Court of Appeals Decision explains why these two cases are not germane to Justus v. State. PERA attorneys, I know you liked these cases, sorry.) From the Colorado PERA Supreme Court Brief: “ . . . the General Assembly has never reduced any existing PERA pension base benefit.” (My comment: Nor has the General Assembly impaired its pension COLA contractual obligations prior to SB 10-001.) Colorado PERA’s Repeat of the “Market-Based” Pension Funding Ratio Deception in its Colorado Supreme Court Brief. From the Colorado PERA Supreme Court Brief: “During the 2008 recession, PERA suffered losses totaling $11.8 billion and its funding ratio fell to 52% . . .” “The recent economic crisis indisputably caused the PERA pension fund to lose nearly $12 billion in 2008 alone and to fall to 52% funded at the end of 2008.” (My comments: Colorado PERA has not hesitated to deceive PERA members, the public, and lower courts regarding measures of the fiscal soundness of the PERA trust funds. PERA repeats this deception in its Colorado Supreme Court Brief, attempting to exaggerate the financial condition of the PERA trust funds by substituting a volatile, non-traditional “market-based” pension funded ratio for the industry-standard, accepted measure of pension funding, the “actuarial funded ratio.” As we have seen, actuarial funded ratios [AFR] have been used by Colorado PERA throughout its history. AFRs are widely used in public defined benefit administration because their use is mandated by federal regulatory agencies. Here is a description of the term “actuarial funded ratio” from the website of the National Association of State Retirement Administrators: “The most recognized measure of a public retirement plan’s ability to meet current and future obligations is its actuarial funding ratio, derived by dividing the actuarial value of a plan’s assets by the value of its liabilities.” Colorado PERA has used this “market-based” funding ratio deception in its legal briefs, legal arguments, and public propaganda. Colorado PERA now brings this deception to the Colorado Supreme Court chambers. Here are a few examples of Colorado PERA’s historical use of “actuarial funded ratios” in communications to PERA members: Colorado PERA Update – [Spring 2006 – page 4]: “See that PERA’s [actuarial] funded status was lower [61.5 percent] 30 years ago than what it is now. You may recall that there was no perceived “crisis” in PERA’s funded status in 1975.” Colorado PERA News Archive for 2004 [9-16-2004]: “PERA’S [actuarial] funded level was below 60 percent in 1970, and there was not a perceived crisis in PERA’s financial health.” The very bill that Colorado PERA is attempting to defend, SB 10-001, uses “actuarial funded ratios” as a measure of the PERA trust fund’s solvency. The “100% funded ratio” in the title of SB 10-001 is an “actuarial funded ratio.” The triggers in SB 10-001 are linked to “actuarial funded ratios.” In considering the case Justus v. State, it is important that the Colorado Supreme Court know the difference between “market-based” pension funded ratios and “actuarial funded ratios [AFR].” At the end of 2008, the combined AFR of the PERA trust funds was 69.8 percent. [Not nearly as scary as PERA’s “52%” figure.] The Supreme Court should see the PERA trust fund’s combined 2008 “actuarial funded ratio” of 69.8% in an historical perspective. During the 40-year period, 1970 to 2009, the PERA “actuarial funded ratio” ranged from a low of 54.5 percent in 1973 to a high of 105.2 percent in 2000. The average actuarial funded ratio over this 40-year period is 78 percent. At the end of 2008, the PERA actuarial funded ratio of 69.8% was mere 8.2% lower than the average PERA actuarial funded ratio over the 40 year period. At the end of 2008, PERA’s actuarial funded ratio of 69.8 percent was 10.2 percent below an 80 percent actuarial funded ratio, considered “well-funded” by Fitch Ratings. During an eleven-year span, from 1970 to 1981, PERA’s actuarial funded ratio was actually lower than it was at the end of 2008, and yet there was no PERA campaign during those eleven years to take vested, earned, accrued, contracted PERA retiree pension benefits. At the time of the breach of retiree pension contracts in SB 10-001, the difference between the Colorado PERA actuarial funded ratio and Wilshire Associates average actuarial funded ratio for 57 state retirement systems was 3.1 percent. Should pension contracts for all of these public pension plans be breached at this level? According to Colorado PERA, the answer is yes. A memorandum [see link below], prepared by the staff of the Colorado General Assembly, provides the historical “actuarial funded ratio” for the Colorado PERA Trust Funds. Colorado PERA is the source of the historical “actuarial funded ratio” statistics displayed in the memorandum. Link: A 2006 Federal Reserve paper, by Ronald A Wirtz, notes that public pension funded ratios in the 50 to 60 percent range were typical in the 1970s: “From a long-term perspective, however, one can't really pin too much of the pension problem on the recent stock market pullback—in fact, it's been a savior for most pensions. Rewind 50 years, and almost all pension assets were invested in U.S. bonds and other fixed-income sorts of securities. Though comparatively safe in terms of protecting assets, such a portfolio could not generate the returns necessary for pension funds to keep up with the benefits promised by generous government employers. During the 1970s, funding ratios generally hovered between 50 and 60 percent.” If the rule of law in the United States somehow survived the low funded ratios of public pension plans in the last century, I believe that we can also make it through this century without breaching public pension contracts. Colorado PERA claims that, considering the financial condition of the PERA Trust Funds in recent years, the PERA trust funds could not be “sustained” short of the taking of contracted benefits in SB 10-001. I ask, if the Colorado PERA Trust Funds could not be “sustained” with an “actuarial funded ratio” of 69 percent in 2009, how were the trust funds “sustained” in the past when the actuarial funding ratio approached 50 percent? Obviously, PERA’s trust funds can be “sustained” when their “actuarial funded ratio” is in the 50-60 percent range, since the “actuarial funded ratio” has been there in the past and the pension trust funds still exist . . . the trust funds were “sustained” without breaching contracts.) From the Colorado PERA Supreme Court Brief: “. . . it is important to underscore that this case is not about the right to COLAs. The General Assembly has preserved the cost-of-living protections for current and future retirees.” (My comment: I am astounded that PERA’s attorneys will write such rubbish. If I take only half of the contents of a bank vault, have I “preserved” the contents of that bank vault for its owners? After all, I did not take 100 percent of the contents of the bank vault. Finally, Colorado PERA’s attorneys write, “. . . this case is not about the right to COLAs.” So, now I can die — nothing I can ever hear will top this Colorado PERA statement. P.S., PERA, smile, if I die your unfunded pension liabilities are reduced . . . no contract breach required.) Support the rule of law in the United States at, Friend Save Pera Cola on Facebook.
      on Saturday
    • Red Delasa
      about 6 months ago
    • Nathasha Fruitloopingit Wright
      Updated information on laws save web site.
      about 8 months ago
    • Pernell Hill
      I recommend this to all who desire information and resources to enlighten and empower their understanding of governmental affairs
      1 · about 9 months ago
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