TITLE

Statutes as Contracts? The "California Rule" and Its Impact on Public Pension Reform

AUTHOR(S)
Monahan, Amy B.
PUB. DATE
May 2012
SOURCE
Iowa Law Review;May2012, Vol. 97 Issue 4, p1029
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
State and local retirement plans are underfunded by trillions of dollars, at a time when many states are facing decreased revenues and increased social needs. As a result, many states are actively considering how best to address the problem of state and local pension plan underfunding given their limited resources. In many states, however, courts have held that the statutes establishing state retirement systems created contracts between the state and employees that prohibit the state from making any detrimental changes to the benefits provided to current employees within such systems, even on a prospective basis. This Article examines the development of such a rule in the California courts, a rule that has been widely influential in this area of law, as evidenced by the fact that courts in twelve other states have followed the California Supreme Court's holdings. This Article demonstrates that by holding that benefits not yet earned are contractually protected, without explaining the basis for finding that such a contract exists, California courts have improperly infringed on legislative power and have fashioned a rule that is inconsistent with both contract and economic theory.
ACCESSION #
76165255

 

Related Articles

  • Northwest gets OK to use affiliate stock for funding pension. Geisel, Jerry // Business Insurance;8/25/2003, Vol. 37 Issue 34, p4 

    Northwest Airlines Inc.'s plan to contribute stock of a regional affiliate airline to its three underfunded pension plans in lieu of cash has been approved by the U.S. Labor Department. The approval of an exemption to federal benefit laws allows Northwest to contribute shares of Pinnacle...

  • Saab AB SWOT Analysis.  // Saab AB SWOT Analysis;10/ 1/2014, p1 

    A business analysis of defense and security company Saab AB is provided, focusing on the strengths, weaknesses, opportunities and threats (SWOT) faced by the company. Strengths include its strong focus on research and development (R&D). Weaknesses include employee pension obligations which are...

  • Fuzzy Math: Public Pensions are Underfunded -- How Bad Is It? Haltom, Renee Courtois // Region Focus;ThirdQuarter2010, Vol. 14 Issue 3, p14 

    The article focuses on public pension underfunding in the U.S. It says that Illinois has the worst public pension underfunding among U.S. states with assets equaling 54 percent liabilities. It mentions the common belief on the impact of lack of funding in pension plans to the local economies as...

  • Using 10-K Text to Gauge Financial Constraints. Bodnaruk, Andriy; Loughran, Tim; McDonald, Bill // Journal of Financial & Quantitative Analysis;Aug2015, Vol. 50 Issue 4, p623 

    Measuring the extent to which a firm is financially constrained is critical in assessing capital structure. Extant measures of financial constraints focus on macro firm characteristics such as age and size, variables highly correlated with other firm attributes. We parse 10-K disclosures filed...

  • The implicit pension debt. Kane, Cheikh; Palacios, Robert // Finance & Development;Jun96, Vol. 33 Issue 2, p36 

    Focuses on the underfunded pension plans of industrial and developing countries. Characterization of private pension guarantees; Liabilities of public plans; Analogy on external debt of a country and implicit pension debt (IPD); Application of external debt overhang to pensions; Pay-as-you-go...

  • Rescue is no way out.  // Pensions & Investments;10/15/2012, Vol. 40 Issue 21, p10 

    The editorial looks at the problem of underfunded pension plans in the U.S. as of 2012, expressing the view that plan underfunding in both the public and private sectors may eventually lead to requests for government bailouts of pension plans, and offering policy suggestions to avoid that outcome.

  • IRS plan would limit lump-sum payments in underfunded DB plans. Greenwald, Judy // Business Insurance;9/3/2007, Vol. 41 Issue 36, p4 

    The article offers information on the Benefit Restrictions for Underfunded Pension Plans, a proposed regulation by the U.S. Internal Revenue Service (IRS) for the defined benefit plans. The regulation proposes that plan sponsors with underfunded defined benefit plans will have limits on their...

  • Section 436 Amendment Deadline Extended for Defined Benefit Plans.  // Employee Plans News;11/29/2012, Vol. 2012 Issue 4, p2 

    The article presents a notice issued by the U.S. Internal Revenue Service (IRS) regarding the extension of period for adopting a section 436 related to defined benefit plans. According to the notice, a defined benefit plan sponsor is required to adopt section 436 by January 1, 2013. The IRS has...

  • IRS Proposes 2008 Pension Mortality Tables. Bell, Allison // National Underwriter / Life & Health Financial Services;6/4/2007, Vol. 111 Issue 22, p8 

    The article reports that the U.S. Internal Revenue Service (IRS) has proposed a 2008 pension mortality table to provide pension plan administrators the figures to calculate the defined benefit plan of their present values and contribution levels. IRS planned to use separate tables for annuitants...

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics