Suit fights ruling on retirement benefits

— Current and former county officials who tried to collect retirement pay without permanently stepping down from their government posts have filed a lawsuit against the state public employees retirement system, contending that their constitutional rights were violated by the state’s decision not to pay their full retirement benefits.

The suit was filed Friday in Pulaski County Circuit Court by former Garland County Assessor Brenda Short, former Garland County Circuit Clerk Vicki Rima, former Garland County Treasurer Jo West Taylor and current Woodruff County Treasurer Marlene Hite.

The four plaintiffs contend that the retirement system’s board treated them differently than other members of the system, denying them their constitutional right of equal protection. They also say the system violated their constitutional rights by taking their property without just compensation - in this case, their complete retirement benefits.

Additionally, the suit claims that the retirement system violated its fiduciary duty to them as system members by providing misleading information to the former county officials and failing to provide policies and procedures for going “off the payroll,” or terminating their employment for 90 days before rejoining their counties’ payrolls.

The three Garland County officials lost their re-election bids in 2010.

The practice of “retiring” temporarily without vacating an elected government post drew heavy scrutiny from politicians, Arkansas Public Employees Retirement System officials and the media, in the summer of 2009 and during the 2010 election season.

As of November 2011, the retirement system had stopped paying benefits to nine county elected officials and two municipal officials who did not properly “ terminate” employment before drawing retirement income and returning to the public payroll, the system’s lawyer said then.

Gail Stone, executive director of the retirement system, didn’t return a call requesting comment on Monday.

Neither did Denise Reid Hoggard, a Little Rock lawyer who is representing the four women.

According to the suit, the one current and three former elected officials “sought the counsel” of the retirement system’s staff to determine how to temporarily terminate “covered employment,” in order to receive both their regular salary and retirement pay when they returned to work after 90 days. State employees receive full retirement benefits after 28 years of work.

The lawsuit alleges that other state employees had been allowed to “retire” for the 90 day period, then come back to work and receive both their salary and retirement benefits. This action has been referred to by some as “double-dipping.” The suit describes the practice as “temporary retirement.”

“Temporary retirements were commonplace,” according to the complaint.

In 2009, Attorney General Dustin McDaniel’s office issued an opinion on temporary retirements.

“This opinion is contrary to both the plain language of the applicable statutes and APERS prior interpretation,” the suit states.

Also in 2009, the Legislature passed a law to curb that practice. Act 657 of that year requires most state employees and officials who retire and receive benefits from the Arkansas Public Employees Retirement System to wait six months before returning to work for an employer covered by the system. Previously, the minimum separation period had been 30 days for state, county and city employees and 90 days for elected officials.

The state retirement system also passed a regulation requiring elected officials who apply for benefits to submit sworn affidavits saying that their offices have been vacated.

The Garland County officials took themselves off the county payroll in 2008. It wasn’t immediately apparent when Hite temporarily retired. The system’s board said the four plaintiffs didn’t properly terminate employment.

The suit alleges that two elected county officials who acted in the same manner as the four plaintiffs were allowed to repay benefits they had received while continuing to build up “service credit” and other benefits.

Front Section, Pages 1 on 12/04/2012

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