Arizona Supreme Court: Legislature Cannot Cut Retirement Benefits

February 20, 2014

The Arizona Supreme Court has ruled lawmakers cannot cut cost-of-living increases to state retirees.

In 2011, the legislature made a series of changes to the state’s four public retirement systems, including the one for judges and elected officials. Lawmakers cited underfunding in the system due, at least in part, to the Great Recession. Later that year, two retired judges sued on behalf of other plan members and beneficiaries, arguing the new law unconstitutionally changed an existing contract.

Lower courts agreed, and on Thursday, the state Supreme Court followed suit. In its decision, the justices write the new formula diminishes or impairs retirement system benefits in two ways. They also note that while they are members of the retirement plan, they are not members of the class of retired judges who filed suit.