By GREG HARTMAN

PERS Coalition Attorney

Here is the latest overview of the PERS Coalition’s various legal challenges to PERS, most dating back in some way or another to the 2003 legislative reforms.

Strunk. Strunk was the Coalition’s challenge to the constitutionality of the 2003 legislation. We prevailed on issues related to COLA and guarantees, but did not prevail on the redirection of the 6 percent employee contribution or on issues relating to actuarial tables. This case is fully concluded with the exception of the question of attorney fees which is currently pending before the Oregon Supreme Court.

Robertson. This was the federal court challenge to the constitutionality of the 2003 legislation under the federal constitution. We did not prevail on the issues that remained after resolution of the Strunk case and this matter is fully concluded.

City of Eugene. Also commonly referred to as the “Lipscomb case,” this was Marion County Circuit Court Judge Paul Lipscomb’s trial court opinion that set the stage for the 2003 legislation and had a very substantial impact on that legislation. Ironically the Supreme Court later vacated the trial court decision so the findings in this case no longer act as precedent. This case is fully concluded including an award of attorney fees, which was paid to the Coalition in partial reimbursement for fees incurred.

Henderson. The Henderson case raises the issue of whether federal court Judge Gus Solomon’s 1978 decree was violated by the PERS move to new actuarial tables. That case is back before the U.S. Ninth Circuit and we don’t have an argument date at this time. 

White. This case challenges the validity of the settlement agreement that concluded the City of Eugene case. The lawsuit also challenges several of the administrative actions taken as a result of that settlement agreement. This case is pending before Multnomah County Circuit Court Judge Henry Kantor. The defendants have taken extraordinary steps to derail this case and to prevent us from beginning the discovery process, which makes me believe that there is substantial concern about this case. In any event we will begin taking depositions in mid-August, which should give us a better sense of the facts that surround the adoption of the settlement agreement and the prospects for ultimately prevailing in this case.

Arken. Arken is the class action suit on behalf of “window retirees” to challenge PERS’ current efforts to reallocate 1999 earnings and make collections from individual retirees. We have scheduled a status conference and hearing on various motions on Aug. 16 before Judge Kantor, which should help sort out the exact status of the case.

Robinson. This is the case being handled by labor attorneys Jim Coon and Gene Mechanic. This case also challenges PERS’ collection efforts, arguing that they are inconsistent with the legislative mandate in Section 14(b) of the 2003 legislation. That case is also scheduled for a status conference on Aug. 16, which should give us more information about the final form of the order that the court will enter. 

Bell. This is a test case to determine whether individuals who have received incorrect advice from PERS that led to their retirement can sue for damages. We are in the early stages of litigation and anticipate that this will likely be resolved by summary judgment.

Murray. This case raises the issue of whether administrative expenses can be charged to the PERS variable account in years where there are no earnings. The case has been fully briefed in the Court of Appeals but no argument date has been set. 

Other Issues

Money match variable. We now have sufficient plaintiffs to commence the legal challenge to the newly adopted money match variable calculation methodology. We’re in the process of getting data from PERS for each of the individuals to make certain that they were, indeed, adversely impacted by the new money match variable calculation methodology. As soon as we’ve confirmed that, we will be filing the case in Multnomah County. 

Rate guaranty reserve. I am anticipating that there are a number of issues that will be raised over the next several years about this reserve. These will in general relate to the proper size of the reserve and how the reserve should be distributed once it has exceeded that appropriate level of funding. The initial Mercer actuarial analysis probably raised as many questions as it answered. The status of this reserve has the potential to be the last major source of disagreement as the system transitions from a money match system to a full formula system. 

Equal-to-or-better-than. With the passage of the new statute PERS should be engaging in rulemaking and as well conducting new equal-to-or-better-than tests. With the new testing approach it is my anticipation that many and perhaps most of the small jurisdictions that remain outside the system may well fail the new legislative test.