Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.
Compliance September 21, 2021
Guam Sued for USERRA Violations
The Justice Department alleges that military employees who used ‘donated leave’ to avoid losing pay were denied pension contributions and credits that were due them.
Reported by Rebecca Moore
The U.S. Department of Justice has filed suit against the Territory of Guam and the Guam Retirement Fund (GRF) alleging they violated the Uniformed Services Employment and Re-Employment Rights Act of 1994 (USERRA) when they refused to properly provide pension credit to service members who used leave from Guam’s leave-sharing program while on active military duty.
USERRA is a federal statute that protects the civilian employment rights of non-career individuals who serve in the U.S. armed forces. Among its protections, USERRA requires employers to treat an employee’s time in military service as service with the employer when determining pension benefits.
According to the complaint filed in the U.S. District Court for the District of Guam, the territory provides a “leave sharing” program, which allows employees to voluntarily transfer a portion of their sick or annual leave to a leave bank. Employees who have exhausted their sick leave, annual leave and compensatory time may draw donated leave from the leave bank to remain in paid-leave status rather than enter leave-without-pay status. Guam and the GRF do not give employees credited service for the time covered by donated leave.
At least five employees used donated leave while on active duty so they could continue to receive pay. The court document says, in some instances, Guam contributed to the employee’s retirement account and withheld the person’s contribution from wages for periods during which he or she used donated leave. However, the GRF refunded the contributions and discredited that service when it learned the employees had used it.
As a result, the employees accumulated less credited service time, have a reduced retirement account and will draw a lower pension annuity for the rest of their lives. Two of the plaintiffs in the case were told they would have to work more years to qualify for full retirement benefits.
The Justice Department says in its complaint that it believes employees other than the plaintiffs have been treated the same way.
The lawsuit asks the court to order the defendants to stop denying service members proper pension credit, to identify all current and former employers who have been harmed by defendants’ discriminatory practice and to properly credit those employees’ retirement funds or adjust their current pension benefits.