Judge overturns Arizona pension law change

by Associated Press (February 4th, 2012 @ 2:17pm)

PHOENIX — A judge has struck down an Arizona law that increased the amount state employees must contribute toward their pensions as unconstitutional.

Maricopa County Superior Court Judge Eileen Willett wrote in a Friday ruling that a state law that went into effect on July 1 illegally changed the contract between the state and its employees. State law, she said, forbid laws "impairing the obligation of a contract."

"When the plaintiffs were hired as teachers, they entered a contractual relationship with the State regarding the public retirement system of which they became members," Willett wrote. "Their retirement benefits were a valuable part of the consideration offered by their employers upon which the teachers relied when accepting employment."

The law increased the contributions state employees must make to their pension from 50 percent to 53 percent.

The Arizona Republic reports the change was made as a cost-cutting move intended to state $60 million a year.

Seven schoolteachers sued after the law took effect.

A spokesman for the Arizona State Retirement System said the organization will review the decisions and its options with the Attorney General's Office before deciding whether to appeal the decision.

Key Republican lawmakers have anticipated the ruling and have proposed rescinding the hike. That could be done through the budget, which lawmakers are still crafting, or via legislation.

House Bill 2264 would return to the previous funding system of a 50-50 split between the state and its workers.

It also would require the state to refund to public employees any contributions made this year in excess of 50 percent.

The bill passed the House Employment and Regulatory Affairs Committee, but it still needs a hearing before the House Appropriations Committee.

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Information from: The Arizona Republic, http://www.azcentral.com

Copyright 2012 The Associated Press.


Last 3 Comments

  • Reply Abuse Vote
    I Agree
    azdriver
    The change represented a breach of contract. But the law can be implemented to affect only new employees. Those contracts have yet to be written. Of course, these are the same employees who took the day off with their students to protest necessary budget cuts. Meanwhile, teachers can't even get their students to read a book.
  • Reply Abuse Vote
    This article is misleading....
    Great Russ
    by stating that the change affected state employees. It only affected education employees. Notice it was 7 teachers, not any other "public" employees like DPS and ADOT. Thats because they was kept at the old rate. Law enforcement, and others on the state retirement system was still at the 50/50 split. While if you was in education, it was 53/47 (employee/employer) and going higher. This was a punitive action against the public education field, plain and simple.
  • Reply Abuse Vote
    Wake Up Voters!
    JW L
    If your elected officials are enacting laws that are so easily thrown out by the courts, it means they, and their teams of advisors, didnt put a whole lot of intelligent thinking into the law. Hiring politicians should be like hiring a lawyer. You could hire the one that tells you what you want to hear, or you could hire the smart one that explains reality to you. Arizonans seem to like the ones that tell them what they want to hear.
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