Posted Feb 21, 2014 04:06 pm CST
Citing a state constitutional guarantee, the Arizona Supreme Court has ruled that lawmakers can’t trim pension increases for retired judges.
The court said the pension increases must be reinstated because of a constitutional provision providing that public pension benefits can’t be diminished or impaired, Capitol Media Services and the Arizona Republic report. Voters approved the constitutional amendment in 1998.
The state had argued the judges didn’t have a vested right to the pension increases because they were based on a formula that was contingent on future events. The state supreme court disagreed, saying that in Arizona, the right to promised terms in a public pension vests upon acceptance of employment.
Legislators who refused to move funds into a reserve fund and changed the formula for benefit increases diminished the benefits in violation of the state constitution, the opinion (PDF) said. Nearly a thousand retired judges will receive $7.9 million because of the decision, according to the Arizona Republic. Public-safety and correctional officers will also benefit, immediately costing the pension trust a total of $40 million for retroactive raises, the story says.
Lawmakers had trimmed the pension increases in 2011 to address a decline in the pension plan’s financial health. State Rep. John Kavanagh is pushing for a voter referendum to repeal the constitutional provision. “This ruling wipes out most of the pension-saving reforms we enacted a few years ago,” he told the Republic.
Hat tip to How Appealing.