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Washington Supreme Court
Thu October 24, 2013
Billions at Stake as State Supreme Court Hears Pension Cases
The state Supreme Court on Thursday heard oral arguments in a pair of pension cases involving billions of dollars at stake. Unions for teachers and state employees want the high court to restore two benefits that were nixed due to their cost.
These lawsuits were triggered by actions the Washington Legislature took to reduce pension costs. In 2007, lawmakers repealed something called gainsharing, a bonus program that kicks in when investments out performed expectations. In 2011, the Legislature repealed the automatic cost of living adjustment, known as UCOLA, for retirees in the state’s oldest pension plans. The unions prevailed in the lower courts.
But Solicitor General Noah Purcell told the Washington Supreme Court that if the justices restore these pension benefits it will come with a hefty price tag.
“The plaintiffs in this case and in the companion UCOLA case are asking this court to order school districts, local governments, and state taxpayers to pay them more than $10 billion in additional pension benefits over the next 25 years,” he said.
Attorneys for unionized teachers and state employees argue that the repeal of benefits amounted to a breach of contract and an unconstitutional taking of vested pension rights.