OLYMPIA – The state Supreme Court on Thursday heard arguments over legislative action in recent years to end some pension benefit increases for state and local government employees.
At issue are two actions taken by lawmakers. In 2007, the Legislature repealed pension “gain-sharing” that benefited retirees when the markets were doing well. Then in 2011, lawmakers ended cost-of-living increases for pensions for public employees enrolled in two older pension plans. Lawsuits were filed by various unions and others opposed to the changes.
In 2010, a King County judge ruled that lawmakers violated contractual rights by taking away gain-sharing without providing comparable replacement benefits. And last year, a Thurston County judge ruled that the Legislature was wrong to eliminate the annual increase in benefits to retirees.
In 1998, state lawmakers decided pensioners should share the wealth when the state’s Wall Street investments did well, so they established “gain-sharing.” In 2007, the Legislature eliminated the pension bonus, but in exchange, some pensioners received cost-of-living increases, and many qualified for earlier retirement without reducing their pension.
In arguments before the high court on Thursday, the state noted that the statute surrounding gain-sharing very clearly stated that the Legislature reserved the right to change or cut the benefit.
“There was never a promise in the statute by the Legislature that gain sharing would continue forever,” Solicitor General Noah Purcell told the court.
James Oswald, an attorney for the plaintiffs, argued that the Legislature could not unilaterally take away a benefit that it promised.