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Legal Update of Pension Issues
Legislation to dramatically alter public employee pension plans will likely generate litigation cases in several states, according to NCPERS legal advisor Bob Klausner in a general session address.
 Klausner began his presentation with an update on the situation in Alaska, which was being fought at the time of the annual conference. As Klausner explained, Governor Murkowski was aggressively pursuing passage in the state legislature of a new pension plan opposed by public employee organizations statewide. The legislature was approaching a critical vote on the proposal that same week. (Look for additional information on the Alaska situation on NCPERS' Monitor.)
Age discrimination in pension plans is an ongoing problem in many states, Klausner reported. He reviewed several specific court cases, including many involving DROP plans. He also discussed age-related cases involving reductions in health care coverage and Medicare, including one in which AARP was a litigant.
Klausner also reviewed several typical problems that can be found in many pension plan documents that could open the trustees to allegations of age discrimination. He offered suggestions on how to correct such problems.
Next, Klausner noted several cases in which local and state governments were seeking to increase employee contributions to health care in defined benefit plans. In most of these cases such changes have been overturned because they must be accompanied by changes in state law approved by the legislature.
Klausner also discussed the problem occurring in many pension plans where unfunded accrued liabilities are becoming political, as well as pension issues. The situation often involves how state law treats the obligations, most often as a current year funding issue, not a public debt, which influences how a state government can address the situation.
Other topics addressed by Klausner included early retirement incentives, forfeiture of benefits, and divorce cases and retirement benefits.
Klausner is the principal in the law firm of Klausner & Kaufman, P.A., which holds an AV rating from Martindale-Hubbell, the highest rating for competence and ethics. Legal counsel to NCPERS and a consultant on retirement issues to numerous state and local government entities, Klausner has appeared as an expert witness before congressional and state legislative committees, was a college professor, has been a lobbyist and is a published author.
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