The Colorado Supreme Court issued its opinion in Justus v. State of Colorado on Monday, October 20, 2014.
Colorado Public Employee’s Retirement Association Pension Plan (PERA)—Cost-of-Living Adjustment—Contracts Clauses of U.S. and Colorado Constitutions.
In this decision, the Colorado Supreme Court determined whether Colorado PERA members have contractual rights for life without change to the cost-of-living adjustment (COLA) formulas in place at their respective retirements. On summary judgment, the district court ruled that PERA retirees had no such contract right to an unchangeable COLA formula.
The court of appeals disagreed. It determined that the retirees have a contract right, and remanded for further review to determine whether Senate Bill 10-001 violated the Contract Clauses of the U.S. and Colorado Constitutions.
The Court held that the 2010 PERA legislation did not establish any contract between PERA and its members entitling them to perpetual receipt of the specific COLA formula in place on the date each became eligible for retirement or on the date each actually retires. The judgment of the court of appeals was reversed and the trial court’s summary judgment order dismissing this case was upheld.