Supreme Court upholds in-state retiree benefit

State: Paying out-of-state retirees the same as those in Alaska would have cost millions

Posted: Wednesday, January 03, 2007

Retirees from state, local governments and schools who live Outside won't get the special cost-of-living allowance available to in-state retirees, the Alaska Supreme Court has ruled.

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Attorney General Talis Colberg said Tuesday a loss in the case would have cost the state's beleaguered Public Employee Retirement System and Teacher Retirement System millions of dollars. The state pays a 10 percent cost-of-living adjustment to retirees who remain in Alaska, to partially make up for the high cost of living here.

The plaintiffs, led by Bob Gallant, a retired Alaska corrections officer now living in Hawaii, argued that the state's cost of living was as high as Alaska's, and that it was unfair for retirees there to receive less than their in-state counterparts. The plaintiffs called the in-state COLA "an unconstitutional restriction on the right to travel" and violation of equal protection provisions of the state and U.S. constitutions.

The court determined that the state government had the legal right to pay some retirees a premium if they continued to live in Alaska. It is legitimate for the state to want to encourage retirees to continue to live here, and the COLA is a fair way to do that, it said.

The Alaska Supreme Court's decision reversed an earlier Superior Court decision.

If the state had been required to pay the additional COLA, it would have further expanded the retirement system's deficit, Colberg said in a press release announcing the decision, which was handed down last week.

"If the nonresident plaintiffs had prevailed, the resulting cost in implementing such an outcome would have created an additional, unplanned burden to our state's retirement system," said Colberg.

Incoming House Minority Leader Beth Kerttula, D-Juneau, said the complaints of out-of-state retirees would likely be looked at by the Legislature to make sure everyone was treated fairly; but it was unlikely the lawmakers would do anything to increase the system's costs. Kerttula said she was sympathetic to retirees living in high-cost areas.

"It isn't easy being retired in America," she said, with rising medical costs and other expenses. Still, she said, it would be difficult to persuade the Legislature to expand benefits across the board.

"It's unlikely the Legislature as a whole would revise the (COLA) program," she said.

The decision does not affect the benefits of resident retirees.

• Pat Forgey can be reached at

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