. . . this past policy mistake should be corrected.
Dear AARP, thank you for the response with your position on this contentious issue. I understand that you are under no obligation to explain your position to me or to other Colorado retirees, so I appreciate the effort.
For the reader, I provide the AARP position on the Colorado General Assembly’s 2010 pension reform legislation (public pension contract breach) here:
“The AARP state office, with input from our volunteer leadership, reached the decision to monitor SB10-001. SB 1 (sponsored by senators Brandon Schaffer and Josh Penry and Representative Andy Kerr) changed the amounts to be contributed by both employers and employees, placed a cap on cost of living adjustments for retirees, modified benefit calculations and eligibility, and created new contributions and guidelines for working retirees. This decision was made after much careful deliberation and discussion with our volunteers – some of whom are PERA members – about the issue and our position. Our AARP volunteers in particular spoke of the shared sacrifice necessary to ensure the long-term solvency of the system. AARP was contacted by members who strongly encouraged us to publicly support this legislation. Some senior organizations, such as the Colorado Senior Lobby, did choose to support the legislation. Other groups, while not fully satisfied with all of the changes, supported the overall reform effort to ensure the financial health of the system. One need only to look at the bipartisan list of co-sponsors and the bipartisan votes for passage in both houses of our legislature to understand that while the issue is complicated many thoughtful people did agree to support SB10-001.
Clearly the PERA issue has been contentious precisely because there is no perfect solution. The AARP advocacy team monitors the solvency of the PERA Retirement Fund. In the 2012 legislative session, AARP actively opposed several of the bills that attacked the PERA and we plan to do the same this year.”
In my opinion, the term “shared sacrifice” was improperly employed in the debate over SB 10-001. This term is being used by groups that are supporting the breach of public pension contracts in a number of other states. Public pension rights are contractual rights; therefore, a decision by one person (or even a majority of interested persons) to relinquish their contractual rights, i.e., “share in the sacrifice,” cannot provide a basis for breaching the public pension contracts of all other members of a public pension. It is not possible for me as an individual to relinquish the contractual rights of another person. Further, the fact that legislation may have “bi-partisan” support lends nothing to its constitutionality. The constitutionality of legislative enactments does not rest on the popularity of the legislation.
The taking of earned, contracted deferred compensation from retirees in SB 10-001 was patently immoral. Apart from the question of the constitutionality of SB 10-001, recognition of its immorality should have given pause to AARP officials and volunteers. When SB 10-001 is struck down by Colorado courts it will be clear that, in 2010, the AARP was on the wrong side of history in our state. However, there is nothing to prevent the AARP from correcting this past policy error.
The long-term solvency of public pension systems is secured through the proper funding of those pension systems, not through the breach of the pension system’s contractual obligations. I’m sure you are aware that the Colorado General Assembly has skipped $4.3 billion in annual required contributions (determined by Colorado PERA’s actuaries) in just the last decade. These skipped payments to the pension system represent Colorado state debt. SB 10-001 attempts to shift this state debt (an obligation of all Colorado taxpayers) onto the backs of a relative few Colorado PERA retirees. Thus, the bill was both immoral and unconstitutional. The “perfect solution” that you mention is obvious . . . the perfect solution is for the State of Colorado and all other PERA-affiliated employers to meet their contractual PERA pension obligations. In fact, ultimately this will be the only choice available under the Contract Clause.
Colorado is the 15th wealthiest state in the nation. We have the lowest state tax burden per capita in the nation. We have pumped $500 million into local government pension obligations that are not the state’s responsibility, while underfunding the state’s contractual PERA pension obligations. The Colorado General Assembly has intentionally slashed its available revenues in the last 15 years. Just yesterday, Senator Morse suggested further cuts to Colorado’s state revenue stream. It is truly tone-deaf that he makes such a proposal while the State of Colorado is in breach of contract. In 2010, the General Assembly’s PERA pension contract breach was a policy choice . . . the General Assembly’s actions in the last 20 years reveal that the contract breach was unnecessary. This policy choice was simply politically convenient. The retirees were weak and unorganized . . . an easy target.
The Colorado PERA public pension debate in 2010 provided an opportunity for the AARP to demonstrate its value to retirees in the United States, and to stand up for the many Colorado PERA retirees who are unable to defend their own contractual rights. (It’s true, for a number of reasons many of these retirees are unable to defend their rights.) This 2010 PERA debate was a missed opportunity for AARP officials to make it clear that you are champions of retiree interests. It breaks my heart that this opportunity was missed, but there is no reason that the AARP cannot step forward and fight for public retiree contractual rights in other states . . . the battle continues.