US - The $51bn Oregon Public Employees Retirement System (PERS) board has requested its members to pay back benefit overpayments worth $800m incurred in 1999.
The news comes after employers sued PERS because its board in 1999 had credited a high amount of earnings to tier one members.
A county court agreed that contribution rates were too high and required the fund to reallocate earnings at 11.33%, instead of the 20% that was originally credited.
Those affected by the board order include: tier one members who retired on or after 1 April 2000 and before 1 April 2004; persons who received or are receiving benefits based on 1999 account balances, and former members or beneficiaries who withdrew their accounts prior to the earnings reallocation.
According to a spokesman at PERS the financial impact of the decision equates to about $800m in total and it will affect approximately 37,800 members. This would mean on average each member would be forced to pay back just over $21,000.
Already PERS has found itself lumbered with a court action over the issue.
On 17 January, 2006, law firm Bennett Hartman Morris and Kaplan, a Portland Oregon law firm, filed a class action complaint in Multnomah County Circuit Court.
The complaint alleges that the PERS Board's intention to pursue collection actions against such retirees for alleged overpayment of 1999 earnings would constitute a breach of their PERS contract, “would be without probable cause, and would cause irreparable harm”.
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