First Circuit Court:The government has no obligation to honor its pension promises

[machidafan99]

http://www.businessinsider.com/rhod...-be-a-warning-sign-for-social-security-2018-2

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.

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 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.

The First Circuit just showed us what the solution is: cutting benefits.

 

[JosephDredd]

Wow. America is such a shitshow.

 

[oldshadow]

Well that sounds fucked up but need to look at it more.

 

[Big Nasty Edison]

Retirees btfo!

 

[JosephDredd]

Civil servants who dedicated their lives to America and its citizens btfo!

Adjusted for accuracy

 

[machidafan99]

Pensions for all or pensions for none! My battle cry!

 

[Son of Jamin]

Sounds like some politicians and judges should retire...

 

[Teppodama]

If the government is unable to meet it's long standing obligations in this regard then those employees should have their state taxes reduced moving forward to make up the difference in valuation they are owed. Reductions in their property taxes, state income taxes, estate tax, vehicle registration. If this means a total negation of these taxes for those individuals then so be it. They provided service in good faith and it's the State that is not honoring their obligation.

 

[12ga.]

Voting Republican has consequences. Republican judges. Prepare for Guided Age part 2.

 

[Quequeg]

Many states have a bloated pension programs for public employees, it has to change or taxes have to go up.

 

[Big Nasty Edison]

Voting Republican has consequences. Republican judges. Prepare for Guided Age part 2.

But liberal judges want to give your house to refugees. Didn't you know?

 

[Trotsky]

http://www.businessinsider.com/rhod...-be-a-warning-sign-for-social-security-2018-2

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.

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 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.

The First Circuit just showed us what the solution is: cutting benefits.

If the State of Illinois adopts this ruling/line of logic, which by all appearances it won't, they could rescind literal billions in pensions.

But, to be frank, state legislatures have gotten away with near robbery on issuing unsustainable state pensions, Illinois most notably. Illinois' state pensions for cops and prison guards are absolutely insane, where some employees receive 80% of their final salary for the rest of their lives.

Adjusted for accuracy

Meh, depending on the tailoring of the ruling, this may be melodramatic.

 

[machidafan99]

If the government is unable to meet it's long standing obligations in this regard then those employees should have their state taxes reduced moving forward to make up the difference in valuation they are owed. Reductions in their property taxes, state income taxes, estate tax, vehicle registration. If this means a total negation of these taxes for those individuals then so be it. They provided service in good faith and it's the State that is not honoring their obligation.

I don't think this solution would fly with their fellow tax payers.
Their pension plans were mismanaged badly and greed took hold. When you say the state should do this or the state should do that you're really asking other tax payers to pay for someone else's mistakes and greed. I don't see that flying. I'm not sure there is a good solution here. The courts seem to be acknowledging that cuts must be made.

Also, I'm sure contributions of younger employees will be increased to pay for those retiring baby boomers.
In New Jersey there was a new law in 2011 that raised those rates.
The contribution rate for workers enrolled in the Public Employees’ Retirement System and Teachers’ Pension and Annuity Fund increased will increase from 5.5 percent to 7.5 percent over seven years.

Police and firemen’s rates increased from 8.5 percent to 10 percent of pay, and state police’s contribution jumped from 7.5 percent to 9 percent. Judicial employees will phase in an additional 9 percent of their salary.

 

[PainIsLIfe]

http://www.businessinsider.com/rhod...-be-a-warning-sign-for-social-security-2018-2

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.

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 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.

The First Circuit just showed us what the solution is: cutting benefits.

You need to read the actual ruling:

At least one municipality, the City of Cranston, also operated its own municipal retirement system. By the mid-1990s, Cranston was experiencing a severe operating deficit and its municipal pension plan was critically underfunded.The Unions and the City came up with a potential solution: all new hires, and perhaps some recent hires, would transfer to the state retirement system. One significant impediment to this rescue plan stood in the way: the state system provided less favorable benefits.

Cranston and the Unions overcame this impediment by convincing representatives from the state retirement board to submit special legislation that would provide certain Cranston police officers and firefighters who joined the state system with benefits in excess of those provided to others under that system.


By 2011, Rhode Island's public employee pension system itself faced dire underfunding, which the state legislature labeled a "fiscal peril" that threatened the ability of Rhode Island's municipalities...........They passed another law to fix the pension system for future retirees.

http://media.ca1.uscourts.gov/pdf.opinions/17-1293P-01A.pdf


If my company pension goes broke I fall into the PBGC system. I see no reason that public unions/pensioners shouldn't do the same.

 

[44nutman]

I bet the Judge that rendered the decision will get his pension.

 

[machidafan99]

That will still require cuts. The state plans and underfunded and the PBGC will be tested if it goes that far.

It's not just Rhode Island pensions that are underfunded but it will be an interesting test case.

You need to read the actual ruling:

At least one municipality, the City of Cranston, also operated its own municipal retirement system. By the mid-1990s, Cranston was experiencing a severe operating deficit and its municipal pension plan was critically underfunded.The Unions and the City came up with a potential solution: all new hires, and perhaps some recent hires, would transfer to the state retirement system. One significant impediment to this rescue plan stood in the way: the state system provided less favorable benefits.

Cranston and the Unions overcame this impediment by convincing representatives from the state retirement board to submit special legislation that would provide certain Cranston police officers and firefighters who joined the state system with benefits in excess of those provided to others under that system.


By 2011, Rhode Island's public employee pension system itself faced dire underfunding, which the state legislature labeled a "fiscal peril" that threatened the ability of Rhode Island's municipalities...........They passed another law to fix the pension system for future retirees.

[URL][URL][URL]http://media.ca1.uscourts.gov/pdf.opinions/17-1293P-01A.pdf[/URL][/URL][/URL]


If my company pension goes broke I fall into the PBGC system. I see no reason that public unions/pensioners shouldn't do the same.

 

[Gunny]

Voting Republican has consequences. Republican judges. Prepare for Guided Age part 2.

Rhode Island has a Democrat governor, a Democrat Treasurer, a Democrat Attorney General, Democrat legislature in both chambers, 2 Democrat senators and an all Democrat delegation to the House of Representatives.

When the union sued the Democrat state government’s plan, the initial district court judge who dismissed the case was an appointee of Democrat, Bill Clinton. When the union appealed that dismissal to the 1st Circuit Court their case was heard by a three judge panel - two of whom were appointees of Democrat, Barack Obama.

It’s obvious you wrote this without bothering to check (or even think about) what you were saying. Should be an easy mistake for you to correct next time around.

 

[SleepyBoy]

WTF is this garbage?

They are taking money that is not theirs away from people that they agreed to pay for services already rendered.. how is this not stealing?

Again, only the government could get away with such reckless criminal negligence.

Oh I know I agreed to pay taxes, but my budget is tight, so I am going to keep the money. I am sure they will be cool with that. Lol

 

[SleepyBoy]

Did they mention how it would affect state senator pensions?

 

[White Whale]

Government and its officials are never held accountable. Look at the Florida high school shooting that just happened. There where warning signs all over the place the F.B.I. was warned several times and the shooting steal occurred.