One of the thorniest issues that states and municipalities have faced as they seek to limit spiraling pension debt for government workers is the issue of just how much of their retirement plans they can change. A researcher at the Federal Reserve Bank of Cleveland has contributed a valuable summation of state laws, which depressingly shows that the majority of states have over the years placed into legislation protections not just on past benefits that workers have already earned through their service, but on any future accruals for those already working for a state or its municipalities. This, union leaders contend, makes it impossible to alter a pension plan for any worker already in the system, so that he can continue earning benefits at the highest level possible for the rest of his career. Of course, there is legal wiggle room. Courts have, for instance, declared portions of pension benefits, such as cost-of-living adjustments, as outside the law, allowing states to alter these benefits. But it seems likely we'll see plenty of court cases as the courts try to define just what constitutes acceptable change under the law.
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