We Continue Efforts to Restore Pension Benefits

A letter from President Joe DiNicola

April 11, 2007
Sisters and Brothers,
SEIU Local 503, OPEU is working with other PERS Coalition partners to continue the fight to restore the pension benefits members were promised at the time they were hired.

Members in PERS-covered positions continue to ask questions about their retirement plan and the status of PERS litigation.

Update on our Lawsuits
Strunk: This is the Oregon Supreme Court case in which we challenged the PERS "reforms" proposed by Governor Kulongoski and adopted by the 2003 Legislature.

We won on (2) issues: we protected the 8% guaranteed rate of return for Tier 1 members and we protected cost-of-living raises for retirees.

We lost on (2) other issues: the Court said that actuarial tables could be updated immediately (reducing member benefits) and the Court also said that 6% PERS member contributions could be diverted to "IAP" accounts. That diversion began Jan 1, '04 and continues for every PERS member until retirement.

The only remaining issue in Strunk is the determination of how much the state owes in court costs for the PERS coalition members (including SEIU Local 503, OPEU).

City of Eugene: This is the so-called “Lipscomb” case involving the re-allocation of member account earnings in 1999, as well as several other issues. Judge Lipscomb had decided at the time of the trial that we were entitled to an award of attorney fees. We held a hearing before Judge Lipscomb and he determined that the PERS coalition is entitled to an award of approximately $62,000.

Arken: This case raises the issue of whether “window retirees” are entitled to the full amount of their retirement or whether they are subject to adjustment in their retirement benefits based on the reallocation of 1999 income.

This case is pending before Judge Kantor in Multnomah County. Regardless of the outcome, it is likely that Judge Kantor’s ruling will be appealed.

Robinson: This is also a case to protect retirees from the impact of the redistribution of 1999 income.

Again, we are awaiting a decision from Judge Kantor in Multnomah County.

Henderson: This is the federal case in which we challenged the implementation of new actuarial tables in 2003 (see Strunk above). We asked the federal court to issue a ruling to explain the meaning of Judge Solomon’s 1978 order about PERS actuarial tables and tell us whether it restricts PERS’s ability to adopt new tables.

This matter was returned from the Ninth Circuit with instructions to the trial judge. The case is set for oral argument very soon on the question of what exactly Judge Solomon’s 1978 order means. Once that initial determination is made then we can determine whether PERS members are entitled to any relief.

Robertson: This federal lawsuit raised the same constitutional issues as Strunk regarding the 2003 legislation under the federal Constitution. We have filed a petition for certiorari before the U.S. Supreme Court and are awaiting their decision whether to hear the case.

Kay Bell: This case raises the issue of whether PERS members can rely on estimates from PERS or whether PERS's can continually readjust member benefits.

This is a test case to determine whether damages can be awarded in instances where PERS has given an estimate and a member has retired based on that estimate and then it is determined that PERS has made some error in doing that calculation. The Bell case is pending in the trial court.

White: This case challenges to the PERS Board's settlement of the City of Eugene case. According to our attorneys, it is becoming clear that PERS really does not want us to be able to determine why they decided to settle the City of Eugene case on terms so favorable to the employers.

From our perspective, the PERS Board did not take the best interests of the members into account when they made that settlement.

Murray: This case challenges the allocation of administrative expenses to the variable account in years in which there are no variable account earnings. The Murray case is pending in the Oregon Court of Appeals.

Money match/variable:
A number of members want to explore the potential of being a named plaintiff in a challenge to the new rule which changes the method of calculating the money match benefit for those who participated in the variable account.

Unfortunately, our attorneys do not think we have received an adequate number of individuals who would be appropriate as plaintiffs.

NOTE: If you or anyone you know recently retired with a significant number of years in PERS and had a variable account and retired on money match, they may suffered a significant loss in their pension benefit. Please contact me directly and I will forward names to our attorneys.

Joe DiNicola, President
SEIU Local 503, OPEU