Home > government and politics, labor, management, pensions, retirement > Legal Constraints on Changes in State and Local Pensions

Legal Constraints on Changes in State and Local Pensions

November 6, 2012

Legal Constraints on Changes in State and Local Pensions

Source: Center for State & Local Government Excellence

This issue brief describes existing legal protections for pensions and reviews recent court decisions that have separated core benefit accruals from cost of living adjustments (COLAs).

Key findings:

  • Most states are legally constrained from reducing future benefits for current workers.
  • These constraints make it difficult to adjust to changing conditions and to share the burdens of reform fairly between new and current participants.
  • The legal boundaries for pension benefits are typically defined under a contracts-based approach rather than a constitutional provision.
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