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Compliance August 6, 2002
Police Sue State For "Stealing" Pension Surplus
June 20, 2001 (PLANSPONSOR.com) -A group of retired
police officers and firefighters filed a class-action lawsuit
against Washington State lawmakers.
Reported by editors@plansponsor.com
The suit charges that lawmakers raided the group’s pension plan in order to balance the 2001-03 budget, contravening state laws, which hold that the fund may only be used to pay participants benefits.
Raiding the Surplus
The suit charges that state action terminating the Law Enforcement Officers’ and Fire Fighters’ pension plan (LEOFF 1), which includes almost 9,500 participants, and moving 76% of the $500 million surplus into a state general reserve fund violates state law.
The state lawmakers have also earmarked 12% of the surplus to assist counties and cities to bankroll their cash-strapped medical benefit plans.
Effectively, the suit claims suit charges that State’s plan strips away 88% of the fund’s surplus to balance the budget and returns 12% of the surplus to a new fund for the retired firefighters and police.
The suit asks the court to grant an injunction, preventing the legislature from using the funds assets while the matter is decided and asks for a complete accounting of fund contributions by the plan’s participants.
The suit names as defendants the state of Washington, the Washington Department of Retirement Systems (DRS) and John Charles, director of DRS.
– Camilla Klein editors@plansponsor.com