Laura and John Arnold Foundation Releases Pension Litigation Summary

Houston — The Laura and John Arnold Foundation (LJAF) today released the ​“Public Sector Pension Reform Litigation Summary” (PLS), a centralized overview of recent pension reform litigation across the country. The summary will be updated quarterly to provide the public with a transparent, timely, and useful review of pension litigation.

“Until now, there was not a truly comprehensive overview of all pension reform litigation in the country,” said Dr. Stuart Buck, LJAF’s Strategic Litigation Counsel and Director of Research. ​“LJAF’s new publication fills that gap by listing all current pension reform litigation and making hard-to-find documents available in one place for the first time. Anyone who is interested in pension reform will now have an accessible and user-friendly resource that collects as much information as possible.”

In light of looming deficits, states and municipalities across the country are taking steps to reform their pension systems. Enacted reforms generally have addressed cost-of-living adjustments, increases in retirement age and contribution rates, and establishment of defined contribution, cash balance and hybrid plans. Once reforms occur, however, they are often challenged in the courts. The most significant legal claim raised against pension reform legislation is that it violates the Contracts Clause of the U.S. Constitution or a state’s constitutional parallel. In both the U.S. and state constitutions, such a clause provides that the government may not pass laws that abrogate contractual responsibilities. These lawsuits pose an obstacle for state policymakers who face increasing budgetary pressure such that funding pension systems at current or projected levels would result in cuts to many other government services, such as schools, roads, or libraries.

Within the past three years, at least 24 jurisdictions have faced lawsuits over pension changes. Due to the quantity of jurisdictions currently in litigation, the PLS will be a useful tracking tool for those looking to stay abreast of court proceedings and final decisions.

The PLS is a part of LJAF’s broader Public Accountability efforts to promote transparency and improve the efficiency and efficacy of the public sector.