The Alaska Supreme Court ruled former employees and some current employees in the state's closed defined benefit plans are eligible for reinstatement in those plans.
The court's decision found that the state violated the Alaska Constitution when it repealed the statutes of the $22.1 billion Alaska Public Employees' Retirement System and $10.4 billion Alaska Teachers' Retirement System, allowing for reinstatement in those plans, according to the court's opinion posted on its website.
The systems' defined benefit plans consisted of three different tiers of participants until July 2006, when the DB plans were closed and new hires were placed on defined contribution plans.
The state at the time provided a deadline of 2010 for potential reinstatement into one of the three DB plan tiers for former employees who had left employment before the plans were frozen and who had returned to state employment. Reinstatement also depended on participants returning any contributions they had withdrawn from the systems.
The Alaska Supreme Court's April 2 decision said that deadline violated Article XII, Section 7 of the constitution that the "accrued benefits" of employees "shall not be diminished or impaired."
The ruling ends a long history of appeals and rulings in a lawsuit originally filed in 2013 by plaintiff Peter Metcalfe, a former DB plan participant who returned to eligible employment in 2012.
"This is an important affirmation of the protection provided by the Alaska Constitution of the benefits promised by our public retirement systems," said a statement on the website of Choate Law Firm, Mr. Metcalfe's attorney. According to that website, current Alaska public employees who were in a defined benefit plan tier but returned to public employment after 2010 and are now in the DC plan, the decision will likely restore those participants' ability to be reinstated into the DB plan.
"It is important to note that although the Alaska Supreme Court has found that the repeal was unconstitutional as applied to the members of the class, there will be further proceedings before the trial court applying the Supreme Court's decision," according to the website.
Mark Choate, the law firm's founding attorney, said he had no further comment beyond the existing statement.
Alysia D. Jones, liaison officer for the Alaska Retirement Management Board, Juneau, which oversees the state's retirement systems, could not be immediately reached for comment.
