Keep your promise. Honor your word. Most of us learned those lessons early in life and realize the value in making sure we follow those guidelines.in our daily affairs.
A recent lawsuit by state and local government retirees attempts to hold Montana state government to the same standard, the same moral obligation.
In 1997, Montana legislators created the “guaranteed annual benefit adjustment,” or GABA, to ensure state, county and city retirees receive a stable source of income in the form of a pension that recognizes the constantly rising cost of living. That GABA began at 1.5 percent and lawmakers increased it to 3 percent in 2001.
The 2013 Legislature, in addressing the financial condition of the public employees’ retirement system, passed a bill that will result in that annual increase dropping to 1 percent on Jan. 1.
The Association of Montana Retired Public Employees, online at http://www.amrpe.org, has joined several retirees in challenging that decision. The lawsuit’s legal argument is relatively simple: The law itself acknowledges that retirement benefits are paid under a contract between government and its employees, and the Legislature’s action this year was an unconstitutional violation of that contract.
But the issue is more than a legal dispute. This is about the well-being of tens of thousands of Montanans. This is about fulfilling a commitment, abiding by a contract and keeping a promise.
The GABA represents such a promise — by its very name a “guarantee” — that that state will not allow those who committed years of their lives to public service to watch their buying power plummet and financial health wither into lives of poverty.
The average retiree leaving government employment in 2012 at the age of 59.3 with 19.8 years of service receives a monthly benefit of just $1,159. Retirees depend on their pensions to pay everyday expenses — their heating bills, health insurance, mortgages, food and clothing costs, and gasoline for their cars.
In making crucial decisions on whether they could afford to retire, employees since 1997 relied on the promise of a permanent annual increase of 1.5 percent annual pension increase, until it was increased to 3 percent in 2001.
Retirees and their association recognize the need to do something about the financial condition of the pension system. But there were reasonable alternatives to shoring up the system without trashing a contract, reneging on one’s word and breaking a promise. Employer contributions could have been increased more or for a longer period of time. A state surplus of more than $500 million or trust funds totaling nearly $2 billion could have been tapped.
The lawsuit challenges the state’s decision to break its promise — its guarantee — to its retirees. It does not seek special treatment for retirees. Rather, it intends to hold the government accountable for its actions by asking the courts to tell the Legislature and governor to keep their promise and honor their word.
Why is this important to all Montanans? If the state can simply ignore its constitutional duty to abide by its contracts with thousands of former employees, then citizens must ask themselves what good is government’s word on any issue? Does the state have the obligation to do what it guarantees to citizens it will do? Is government credible? Can it be believed?
(Russell Wrigg, president of the Association of Montana Retired Public Employees, worked for the state Department of Transportation for 30 years and retired in 1991.)