Milliman will not have to pay the Maryland State Retirement and Pension System $34 million for lost contributions that resulted from coding errors Milliman made while serving as actuary for the system, a Baltimore City Circuit Court judge has ruled. But a state board’s decision that the actuarial firm should pay the plan $39 million for breach of contract was upheld.
In a ruling issued July 23, Baltimore Circuit Court Judge Alfred Nance agreed with the Maryland State Board of Contract Appeals’ Jan. 11 decision that Milliman made coding errors between 1982 and 2004 that resulted in a $39 million loss in investment earnings for the $31.8 billion retirement system.
However, Mr. Nance reversed the decision that Milliman also owes the Baltimore pension plan $34 million due to lost contributions that should have been made.
“Obviously, the retirement system believes it is entitled to the lost contributions,” Dana Reed, an assistant state attorney general representing the system, said in a telephone interview, though a decision has not been made on whether to appeal.
If either Milliman or the retirement system appeals the decision, the case would move to the Maryland Court of Special Appeals, Ms. Reed said.
Milliman spokesman Jim Loughman stopped short of saying the company plans to appeal the decision, but hinted further court action is forthcoming. “We consider Judge Nance’s ruling to be progress in an ongoing legal procedure, and we’re moving on to the next round,” he said in a telephone interview.