Alaskan News

The Alaska Supreme Court docket restores entry to retirement advantages for public staff and lecturers

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Alaska Supreme Court Justice Daniel Winfree and then Chief Justice Dana Fabe listened to an oral argument in Peter Metcalfe v. Alaska in February 2015. (Photo by Matt Miller / KTOO)

The Alaska Supreme Court says lawmakers violated the state constitution by arbitrarily restricting when some public employees could return to work and pension contributions. The decision offers 78,000 Alaskans a second chance to return to the state's coveted and most generous retirement plan.

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"I was delighted to learn that the Alaska Supreme Court reaffirmed the Constitution on Friday that it is unconstitutional for lawmakers to simply legislate to try to overcome a promise in the Constitution," said Peter Metcalfe of Juneau.

Metcalfe served briefly for the state in 1972 and 1980, qualifying for what would later become known as Tier I in PERS or the Public Employees Retirement System. Tier I was the golden ticket for public employees in Alaska, perhaps in the country at the time.

It was a defined benefit plan that included guaranteed income for the life of a retired worker. These included inflation and cost of living adjustments, as well as health insurance for a public employee or teacher – and their dependents – when they retired at the age of 50.

In 2005 the legislature stopped all of that. They closed the first three levels of PERS and TRS, the teacher pension system, for new members. They also created a new defined contribution retirement plan, known as Tier IV, which benefits weren't as generous.

However, the legislature has also set a deadline for former employees who paid their pension contributions on their departure. They could re-qualify as Tier I as long as they return to work and pay their money back by 2010.

And at this deadline the legislature broke the promise he made to state employees.

"In general, a title called Section 7 of the Alaska Constitution positively affirms that once workers' rights are obtained they cannot be removed," Metcalfe said.

In a 3-2 ruling on April 2, justices of the Alaska Supreme Court ruled in favor of Metcalfe.

Now 78,000 Alaskans could find their way back into the state's more generous retirement programs.

Metcalfe said he really has no plans to work for the state – a requirement for him to find his way back into the Tier 1 benefit program. But that wasn't the point.

"It's a principle," said Metcalfe. "I don't think the legislature or the governor should try, willy-nilly, to restrict benefits, freedom of expression, or anything else the constitution protects."

Attorneys (from left) Mark Choate, Jon Choate, and Kevin Wakley, along with Larry Davis of the Alaska Division of Retirement and Benefits, prepare for an oral argument in Peter Metcalfe v State of Alaska before the Alaska Supreme Court in February 2015. (Photo by Matt Miller / KTOO)

Metcalfe attorney Mark Choate said he remembered when lawmakers were debating changes to the retirement benefit program.

“When the legislature did this in 2005, I think there were a lot of setbacks within the legal community who gave advice and said, 'This is not right. You can't do this. It's against the constitution, ”Choate recalls. “And the legislature decided to do it anyway because they thought it would save them a lot of money. And maybe nobody would do anything about it. "

Choate said the decision applies to any former employee who is paying off and hasn't returned to work or who has already returned to work on a less generous retirement plan.

The eight-year-old class action lawsuit had previously been reviewed twice by the lower courts and challenged twice in the Alaska Supreme Court.

Two retired judges were brought in to hear it. Choate said two current judges were forced to retire on the latest appeal because they also worked as government employees early in their careers.

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