| Public pension systems are underfunded, straining state budgets. Historically, many states have presumed that they can modify pension benefits only as to newly-hired employees, and that they must leave benefit accruals untouched for current workers. More recently, though, states have begun enacting more fundamental pension reform that modifies future accruals or even reduces cost-of-living allowances for retirees. Nearly all such new reforms have been the subject of one or more lawsuits alleging that the federal and/or state constitution bars the legislature from reducing benefits or accrual patterns. This dissertation examines the legal underpinnings for arguments made against pension reform, and suggests that constitutional doctrine ought to allow pension systems to be reformed in ways that protect past benefit accruals while reorganizing future benefit accruals in a way that is fairer to younger and more mobile workers. That theory is consistent with contract law and constitutional principles.;The dissertation then moves to the real challenge, which is how to apply that theory in particular cases, such as contribution increases, cost of living reductions, retirement age increases, or the establishment of a different pension system entirely. In such cases, it is not always immediately obvious what it means to protect past accruals but allow modifications to future accruals. Given that neither state nor federal judges are pension specialists, courts may benefit from a closer examination of a wide variety of pension reforms. |
