Public pension legal issues take several forms, chiefly a) preparing and reviewing contracts for retirement plan services; b) reviewing proposals for legislation and administrative rules affecting the retirement system; c) compliance with the Internal Revenue Code and other federal regulations; d) proposed changes in plan design; and e) securities litigation, relating to efforts by pension funds to seek compensation for losses suffered as a result of violations of federal securities regulations.
Arrangements by public retirement systems to secure legal counsel include the use of in-house attorneys, members of the state (or sponsoring entity's) attorney-general staff, or outsourcing of legal advice. Areas of law requiring more specialized knowledge, such as compliance with the Internal Revenue Code and securities litigation, more often are outsourced.
- Local governments take budget knife to retiree health plans, Reuters
- Public pension plans brace for legal challenges, by Hazel Bradford, Pensions & Investments
- Pension Reforms Have Their Day in Court, by Amy Monahan, Bloomberg
- State Pension Litigation Update, maintained by State Budget Solutions
- Pension Litigation Summary, Stuart Buck, Ph.D., J.D., April 2013
Internal Revenue Code Compliance
Most governmental retirement systems have been established and maintained as qualified governmental plans under the Internal Revenue Code ("IRC" or "Code") § 401(a). In order to protect that status and provide favorable tax treatment for members' benefits, counsel should be aware of qualification requirements.
Chapter 9 of the United States Bankruptcy Code provides for the assistance to and reorganization of distressed municipalities including cities, towns, and other administrative districts. Chapter 9 provides municipalities protection from creditors while they come up with a plan to pay off their debts. Since 1980 there have been 271 municipal bankruptcy filings, with most cases involving utilities or special districts. So far in 2012 9 municipalities have filed for Chapter 9, compared to 13 in all of 2011 .
- Municipal Bankruptcy: Standard & Poor's Approach and Viewpoint, Standard & Poor's, October 4, 2012
- Q&A on Municipal Bankruptcy, California Legislative Analyst's Office
- Summary of CalPERS Legal Position on Municipal Bankruptcy, As Delivered by Peter Mixon to the CalPERS Board of Administration on September 12, 2012
- Bankrupt Cities, Municipalities List and Map, Governing Magazine
Legal Issues by Topic
- Confidentiality of Member Data
- Constitutionality of Pension Reforms
- Proposed Changes in Plan Design
- Contractual Right to Pension Benefits
- Contractual Right to Health Care Benefits
- Cost of Living Adjustments
- Changes to Benefits for Vested Employees
- Gain Sharing
- Increased Pension Contributions
- Legislative Process
- Overpayment of Pension Benefits
- Taxation of Pension Benefits
Legal Issues by State
- Alabama Legal Challenges
- Arizona Legal Challenges
- California Legal Challenges
- Colorado Legal Challenges
- Florida Legal Challenges
- Louisiana Legal Challenges
- Maine Legal Challenges
- Michigan Legal Challenges
- Minnesota Legal Challenges
- New Hampshire Legal Challenges
- New Jersey Legal Challenges
- New Mexico Legal Challenges
- New York Legal Challenges
- Oregon Legal Challenges
- Rhode Island Legal Challenges
- South Dakota Legal Challenges
- Washington Legal Challenges
- Summary of Legal Protections for Public Pensions by State, Prepared by Robert Klausner, Esq. (Klausner, Kaufman, Jensen & Levinson)
- Navigating the Legal Landscape for Public Pension Reform: Travel at Your Own Risk
- A Legal Guide to State Pension Reform, Jennie Herriot-Hatfield, Amy Monahan, Sarah Rosenberg, and Bill Tucker, February 2012
- Pension Litigation Summary, Stuart Buck, Laura and John Arnold Foundation, January 2013
- Public Pension Benefits Under Siege: Does State Law Facilitate or Block Recent Efforts to Cut the Pension Benefits of Public Servants?, Eric M. Madair, Illinois Senate Parliamentarian and Chief Legal Counsel to Illinois Senate President John J. Cullerton
- Legal Constraints on Changes in State and Local Pensions, Center for Retirement Research, August 2012
- Statutes As Contracts? The "California Rule" and Its Impact on Public Pension Reform examines whether statutes establishing state retirement systems constitute a contract with employees in the state of California and tracks the development of this issue in the California courts.
- The Congressional Research Service in December 2011 updated a March 2011 report, "State and Local Pension Plans and Fiscal Distress: A Legal Overview," which "provides an overview of how public pension plans are regulated at the federal and state level, discusses selected legal issues that may arise in attempting to remedy or prevent public pension plan underfunding by modifying public pension plan benefits, and addresses possible federal regulation of state and local public pension plans."
- Amy Monahan's paper, "Public Pension Plans: The Legal Framework" (University of Minnesota, 2010) presents a concise overview of state regulations pertaining to reductions in public pension benefits.
- State Pension Deficits, the Recession, and a Modern View of the Contracts Clause, Whitney Cloud, Yale Law Journal, examines state courts’ use of the Contracts Clause in pension benefit cases through the lens of the Justus v. State case in Colorado (see above).
- Robert Klausner prepared for the National Conference on Public Employee Retirement Systems a state-by-state capsule summary of public pension legal protections.
- National Association of Public Pension Attorneys
- State-by-state protections of pension benefits
- Qualified Status