important INFORMATION ABOUT ONGOING ALASKA PUBLIC EMPLOYEEs' RETIREMENT SYSTEM (PERS) AND TEACHERS' RETIREMENT SYSTEM (TRS) LITIGATION
On November 4th, 2016, the Alaska Supreme Court released its decision in Metcalfe v. State of Alaska, a case challenging the legislature's decision in 2005 to remove the ability for former Alaska Public Employees' Retirement System (PERS) and Teachers' Retirement System (TRS) members to be reinstated at their prior level of tier service for retirement benefits after 1) returning to public employment and 2) paying back any refunded contributions. The Supreme Court reversed the Superior Court's dismissal of the case on statute of limitations grounds, and this challenge will now return to the Superior Court for further litigation.
If you are a former member of PERS or TRS who left public employment and took a refund of your PERS or TRS contributions the outcome of this litigation may have important consequences regarding your ability to be reinstated at your prior PERS or TRS tier level. Similarly, if you are a current Alaska public employee who had a higher PERS or TRS tier level in the past, but returned to public employment after 2010 and now have a lower tier level, the outcome of this litigation may have important consequences regarding your ability to be reinstated at your prior PERS or TRS tier level.
It is important to note that no final decision has been reached in this case. The litigation is ongoing.
We have prepared a Frequently Asked Questions guide below to try to answer the most common questions that people have contacted us with regarding the litigation.
frequently asked questions regarding the metcalfe v. state pers/trs litigation
1. What is this case about?
This case challenges the constitutionality of a 2005 law which, among other things, repealed the statute that allowed former PERS and TRS members to be reinstated to their prior level of tier (e.g. Tier 1, Tier 2, Tier 3) status upon returning to public employment and paying back any refunded contributions. We argued that the removal of the ability to be reinstated at prior tier level violated Article XII, section 7 of the Alaska Constitution, which protects accrued benefits of membership in public retirement systems in Alaska from being reduced. We argued that the ability to leave the system and return at the same tier level was an accrued benefit, and that its removal reduced that benefit.
2. WHY HAVEN'T I HEARD ABOUT THIS SINCE 2015?
The Superior Court (the trial court) dismissed the case in 2014, deciding that the case was barred by the statute of limitations (it hadn't been brought soon enough after the repeal of the law). We appealed that decision and the case was briefed and argued in front of the Alaska Supreme Court in late 2014/early 2015. The case was then effectively on hold until the Supreme Court released its decision on November 4th, 2016.
3. What did the alaska supreme court decide?
The case against the State had two components: a contract claim for damages for former PERS/TRS members who were unable to return to their prior tier status because of the change in the law, and a declaratory judgment claim asking that a court rule the law repealing the benefit unconstitutional and prevent the state from enforcing it.
The Supreme Court decided that the contract claim for damages based on violation of a constitutional provision could not exist in Alaska law, and dismissed that component of the case. On the other hand, the Supreme Court also decided that there was no statute of limitations that applied to the component challenging the validity of the law: because it sought to prevent the State from preventing people from being reinstated in the future, the statute of limitations does not apply.
The Supreme Court did not decide whether reinstatement was a benefit for purposes of Article XII, section 7 of the Alaska Constitution, and has remanded (returned) the case to the Superior Court to make that decision.
If you are interested, here is a link to the Supreme Court's decision.
4. does this mean that if i take a job with the state that i can return to my prior tier level?
No, or at least not yet. The Superior Court still has to make a final decision about whether reinstatement was a benefit and whether the repeal of that benefit violated the Alaska Constitution.
5. Okay, so what does this all mean?
For former PERS/TRS members who were unable to return after the repeal of the reinstatement benefit in 2010, or returned after the repeal and too late to return to their prior tier status, the Supreme Court's decision means that the statute of limitations does not prevent a legal challenge to whether the repeal of the benefit violated the Alaska Constitution as to that former PERS/TRS member. This means that Mr. Metcalfe's challenge to the constitutionality of the law will go forward in the Superior Court for that court to make a decision about whether the repeal violated the Constitution. It also means that other former PERS/TRS members may be able to bring challenges of their own, or, potentially, join in Mr. Metcalfe's challenge as a group, in what we call a class action.
6. what happens if you win?
That will depend on what the Superior Court decides. If we are successful, the expectation is that the State won't be able to enforce the repeal of the reinstatement benefit against returning former PERS/TRS members, effectively allowing those former members to be reinstated at their former tier status. Similarly, current public employees who had prior service at higher tier levels may be able to return to those tier levels. Alternatively, the State may have to provide a different benefit as compensation for the removal of the reinstatement benefit.
7. HOW DO I JOIN THE CLASS ACTION?
Before we can go forward as a class action, we have to get approval from the Superior Court. In the meantime, please fill out the form below. We are attempting to identify as many people as possible who may be affected if we are successful in this case to make sure they can be notified of their rights. Please note that by filling out this form you are giving the Choate Law Firm permission to contact you regarding this case. Your information will be kept confidential.