Does the U.S. Constitution protect public workers’ pensions?November 15th, 2011 at 6:00 am by Ted Nesi under Nesi's Notes
There’s no thornier debate in the pension discussion than the question of whether retirees have legal – and perhaps even constitutional – rights to the full benefits they were originally promised. Los Angeles Times political columnist George Skelton took a look at it in the context of California on Monday, but there’s plenty for Rhode Islanders to learn.
On the one hand, Skelton writes:
In Philadelphia, 224 years ago, some men tucked these words into the nation’s new Constitution: “No state shall … pass any … law impairing the obligation of contracts…”
Those words, squeezed into a very long sentence in Article 1, Section 10, listing powers denied the states, became known as the “contracts clause.” …
As widely interpreted — most importantly by the courts (or so we laymen are told) — the clause means that pensions promised state and local government workers on the day they were hired cannot be reduced without giving them a new compensating benefit.
On the other hand, Chapman University law professor John Eastman tells Skelton:
His reading of two centuries of case law on the contract clause, Eastman says, is that public pension plans can be modified if there’s “a real serious fiscal problem, a dire financial need — and the system is underfunded. Given the circumstances in California, I think we would meet the legal requirement.”
He adds: “Guys in the Legislature made [pension] promises they cannot fund. Making sure that future generations of taxpayers are not held to that obligation is not a violation of the contracts clause.”
Read the whole thing. And speaking of pensions, don’t miss the findings of Target 12′s latest “Probing Pensions” investigation tonight at 10 p.m. on Fox Providence and 11 p.m. on WPRI 12.