Sunday, January 17, 2021
Breaking News

WFSE – GAINSHARING COURT RULING COULD COME BY FEBRUARY

From The Washington Federation of State Employees, WFSE.ORG

LATEST GAINSHARING COURT RULING COULD COME BY FEBRUARY

It’ll likely be January or February before we’ll get a final court ruling on the Early Retirement Factor part of the union’s gainsharing lawsuit. WFSE/AFSCME attorneys, along with lawyers from the Washington Education Association, were back in King County Superior Court in Seattle on Dec. 16, asking Judge Richard Eadie to rule that it was illegal for the state to repeal the Early Retirement Factor (ERFs) benefits for PERS 1, 2, and 3. The state was there to argue that the court should grant them summary judgment regarding the ERFs. The state argued that because the court had already found that the removal of gainsharing was illegal, the statute required that the “poison pill” element apply. The “poison pill” was what the Legislature put in the law. It says that if there is a final (any appeals taken exhausted) decision by a court that the repeal of gainsharing was illegal, then the benefits (ERFs) given by the Legislature allegedly to replace the loss of gainsharing, would themselves be repealed. We think this is illegal and said so on Dec. 16. We argued that the ERFs should remain for all three plan members. There likely will be a memorandum ruling issued sometime in January. The parties will then have to draft an order based on the ruling and present it to the judge. It’s difficult to say when that order would be final, but it will likely be sometime in January or February. It is unknown at this point whether either party will appeal the decision. To recap this sometimes-complicated litigation, the Legislature in 2007 repealed the gainsharing benefit that had been enacted for PERS 3 and PERS 1 retirees when PERS 3 was created in the mid-1990s. Gainsharing was the sharing of extraordinary investment gains based on a set period of time and exceeding a certain percentage. When the Legislature repealed gainsharing, lawmakers added as incentive the earlier retirement benefits for PERS 2 members so they could retire at age 62 with 30 years of service with no benefit reduction. It was divisive because it penalized PERS 1 and PERS 3 enrollees to benefit PERS 2 retirees. But a “poison pill” provision said if anyone ever sued and reinstated gainsharing for PERS 3 and PERS 1, that the earlier retirement for PERS 2 would go away as well. The Federation did sue and the court did in fact reinstate gainsharing. So phase 2 of our lawsuit in parts is over the earlier retirement in PERS 2. As we said earlier, we believe it should remain as well for many sound legal and constitutional reasons we can’t go into detail on here. Those who have already retired under the PERS 2 earlier retirement benefit (and received their first pension check) are grandfathered in, but those of you in PERS 2 planning your future retirement are understandably anxious about these ongoing court proceedings. We’ll keep you updated.

8 comments

  1. Deborah Christian

    I would like to retire using the ERF and was told it would still be available next year when I turn 60. Will it still be there when I’m 61 or 62? Is there anyway to predict what the outcome will be for ERF?

    Thanks,
    Deb Christian
    Teacher

    • The ERF will be available to current employees, if the legislature leaves the law as is.

      The legislature took the ERF’s away from new employees hired after 5/1/13.

      George Masten
      Interim Executive Director

  2. hello, although i like to think i am staying abreast of this situation by being on email update lists etc., and by the way obviously appreciate all the good work being done by those in the trenches dealing with this imprtant matter, after coming across this website i will simply put my self serving question out here in hopes of some kind of a reply. in my particular situation, i have 35 years with wsda in vancouver and will soon be 57 years old. the difference between the erf factor and retirement without erf is appox 300 dollars a month. if i lived 20 more years, the difference in life income would be 72,000 dollars gross. i have decided to retire immediatly IF the erf gets overturned. soooo…… does anyone know if in fact that happens, will there be a 90 day window or some other oppurtunity to ensure those of us who would make this important decision would be given a final chance to take advantage of the erf? i was prepared to retire june 2012 but was hit up with an order to continue support to my college age daughter, so happily agreed to work until june of 2014 to ensure her insurance and support. but if the erf is taken away before june 2014 it would be difficult to retire at that point. one might think if 300.00 a month makes that big a difference, i shouldnt retire, but in my case it does make a significant difference but in a few years i will have no mortgage and even with paying my own health ins. until that time comes, i have came to the conclusion that i could do it and would retire. in a nushell, my question is, will there be a window of time to retire if erf is taken away? keith dahl, wsda grain inspection. vancouver.

    • We are under the same vote as you. My understanding is that you have to have received your first check to be grandfathered in.

  3. In what year was this article published? Is there more current information?

  4. I hope this can be settled in a manner in which nobody is adversely impacted. Gain sharing was offered as part of the solicitation/enticement for existing Pers 2 members to switch over to Plan 3. It was also offered for a time as part of the benefit package for new employees choosing between Pers 2 & Pers 3. Gain sharing never had anything to do with ERF’s until they were unfortunately linked through “replacement benefits.” This created separate groups with opposing interests. Although some would certainly gain from being able to retire after 30 years without a reduced benefit, it would be at the expense of a class who lost the promise of gain sharing.
    Gain sharing and ERF’s are separate issues, and I hope they are decided on separately.

  5. I certainly respect the 62/30 option, but, I switched to pers3 after I was promised gain sharing….and that I could raise my contribution at any time. That was a lie. Now I must supplement my pers3 with deferred comp and such.

Leave a Reply

Your email address will not be published. Required fields are marked *

*