February 14, 2012 | last updated February 15, 2012 10:43 am

State retirees group files suit over pension changes

A 15,000-member group that represents retired state workers and teachers filed a lawsuit yesterday against the state retirement system over changes made last year to cost-of-living payments.

In a class-action suit filed in federal district court in Bangor, the Maine Association of Retirees opposes the freeze of cost-of-living adjustments for three years and a new 3% cap on cost-of-living increases after that, according to MaineToday Media. The suit claims the changes go against the contract clauses of the U.S. and Maine constitutions on public employee pensions. The plaintiffs want the court to award retroactive cost-of-living adjustments.

The changes were made in the $6.1 billion budget passed last June in order to help pay down a $4 billion unfunded liability in the state pension system. Per the state constitution, Maine must pay off all retirement system debt by 2028. The Maine Public Employees Retirement System is currently devising a proposal to overhaul the retirement system that would allow public employees to participate in Social Security as well 401(k)-type contribution system and a benefit plan, according to the news service. A report on that proposal is expected in the next few weeks.


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