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then the benefits (ERFs) given by the Legislature allegedly to replace the loss of gainsharing, would themselves be repealed.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 To recap this sometimes-complicated litigation, the Legislature in 2007 repealed the gainsharing benefit that had been enacted for PERS 3 and PERS 1 retirees when PERS 3 was created in the mid-1990s.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 When the Legislature repealed gainsharing, lawmakers added as incentive the earlier retirement benefits for PERS 2 members so they could retire at age 62 with 30 years of service with no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.