Alaska Supreme Court Hears Case Over Benefit Tiers

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In the last decade, Alaska has overhauled its pension system by shifting public workers out of a traditional pension system and into a 401(k)-style system.

But another important change has, until now, flown largely under the radar. Alaska’s public employees used to be able to leave their jobs and come back later while still qualifying for the same benefit “tier”.

But the state changed that rule, so public employees who leave and come back can no longer be reinstated under the same tier. In essence, they have to start from square one again.

The state’s Supreme Court is now considering the legality of the change.

More from Juneau Empire:

Three justices of the high court traveled to Juneau Tuesday to hear grievances about a former state worker who, due to the law change, would be prevented from receiving the same level of retirement benefits as before if he returned to state employment.

Attorney Jon Choate, who along with his father attorney Mark Choate represents Peter Metcalfe, says the state of Alaska “broke its promise” to Metcalfe and as many as 85,000 former Public Employees Retirement System (PERS) members when it took away their ability to be reinstated at the same tier level they had when they left state employment.

“If the state makes a deal that lasts the lifetime of a public employee, the state doesn’t get to argue later, ‘Well, I really regret making that deal, it’s too expensive,’” Jon Choate said during oral arguments held at the state courthouse in downtown Juneau. “… Changing health care costs are a significant concern, but they don’t trump constitutional protection.”

Metcalfe is arguing that the state broke its contractual obligation to workers when it pared back benefits and closed off certain tiers to new hires.

The case is Peter Metcalfe v. State of Alaska.


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