Retirement Account Interest Calculations

Probst v. Department of Retirement Systems

This lawsuit was brought in January 2005 when Jeffrey Probst, a member of the Public Employees' Retirement System ("PERS"), claimed that he and a class of similarly situated members were entitled to additional interest on their Accumulated Contributions upon transfer between or withdrawal from the State retirement plans. The lawsuit claimed that the Department failed to correctly calculate the amount payable to class members when they transferred from Plan 2 to Plan 3, or when they withdrew from Plan 2. In particular, the lawsuit claimed that the Department should have used a different method for calculating interest on the transferred or withdrawn amounts and that the proper calculation would have resulted in increased interest for members. The Department believes that its method for calculating interest was proper and within its discretionary authority.

Class Members

This case is partially settled. The settlement class is:

• All (a) persons who transferred Accumulated Contributions from PERS Plan 2 to PERS Plan 3 with a transfer date through the date on which the Court enters the Preliminary Approval Order, (b) persons who transferred Accumulated Contributions from TRS Plan 2 to TRS Plan 3 with a transfer date from January 20, 2002 through the date on which the Court enters the Preliminary Approval Order; (c) persons who withdrew Accumulated Contributions from PERS Plan 2 from January 20, 2002, through the date of the Preliminary Approval Order, and (d) persons who withdrew Accumulated Contributions from TRS Plan 2 from January 20, 2002, through the date of the Preliminary Approval Order; provided, however, that any person who withdrew Accumulated Contributions as described in items (c) or (d) above and subsequently restored the withdrawn contributions to the account from which they were withdrawn on or before the date of the Preliminary Approval Order, is not a Settlement Class Member by virtue of that withdrawal.

Proposed Settlement

The Washington State Department of Retirement Systems (the "Department") has agreed, subject to approval by the Court, to settle claims relating to the calculation of interest on individual account balances that were:

• Transferred from PERS Plan 2 to PERS Plan 3 on or after January 20, 2002; or
• Withdrawn from PERS Plan 2 on or after January 20, 2002; or
• Transferred from TRS Plan 2 to TRS Plan 3, on or after January 20, 2002; or
• Withdrawn from TRS Plan 2 on or after January 20, 2002.