PIERRE, S.D. (AP) — The South Dakota Legislature acted legally when it trimmed the annual cost-of-living increase for retirees in the state's public pension plan during the recent economic crisis, a state judge ruled Wednesday.
The ruling, issued by Circuit Judge Mark Barnett of Pierre, rejected a retiree's claims that a 2010 cut in the annual inflationary adjustment was an unconstitutional violation of a contract between the state and members of the South Dakota Retirement System.
The judge said the Legislature had the constitutional authority to change the cost-of-living adjustment in response to the economic downturn, which damaged the retirement system's financial health. Retirees have no contract guaranteeing that the cost-of-living adjustment will not change, so the cutback to a lower adjustment did not amount to an improper taking of private property, he said.
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