Friday, March 30, 2012

Legal analyis finds Jindal-backed state pension changes are likely unconstitutional

Posted By on Fri, Mar 30, 2012 at 1:59 PM

Via Louisiana Voice

A legal analysis of Gov. Bobby Jindal's state employee pension overhauls, commissioned by the Louisiana Legislative Auditor, has found that, if passed, the bills are likely to be challenged in court and that the challengers are likely to win.

From the report:

The challenges would most likely allege violations under: (1) Article X, § 29 of the Louisiana Constitution, which protects public pension benefits, (2) the Contract Clause within both the Louisiana and U.S. Constitutions (claiming contract impairment due to diminished benefits); (3) the Takings Clause of both the Louisiana and U.S. Constitutions (for divesting public employee benefits without just compensation); (4) the Due Process Clauses of both the Louisiana Constitution'* and the Fifth Amendment to the U.S. Constitution (for depriving employees' of property rights without dueprocess); and (5) 42 U.S.C. § 1983 against public officials for enforcing unconstitutional laws.

Tom Aswell of Louisiana Voice highlights this quote further down in the report:

The former notion that pension benefits were a voluntary gift from the employer (and thus subject to revision or termination at the employer's sole discretion) has since yielded to an understanding that pension benefits comprise an essential component of public employee compensation and that public employees have a significant contractual interest in these benefits.

Jindal's "reform" plan aims to increase retirement age to 67 from 55, raise employee contributions by three percent, change the formula now used to calculate retirement pay (lowering the pay in most cases) and merge the Louisiana School Employees' Retirement System with the Teachers' Retirement System of Louisiana.

Read the full analysis by Dallas-based law firm Strasburger and Price here (39 page PDF): 00028CB2.pdf

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