Retirement Account Interest Calculations

Probst v. Department of Retirement Systems

Background

This class action lawsuit was brought in January 2005 when Jeffrey Probst, a member of the Public Employees' Retirement System ("PERS"), claimed that the Department of Retirement Systems failed to correctly calculate the amount payable to class members when they transferred from a Plan 2 to Plan 3. In particular, the lawsuit claimed that the Department should have used the daily interest method for calculating interest on class members' funds (rather than the Department's quarterly interest method) and that the proper calculation would have resulted in increased interest for members. The Department argued that its quarterly method for calculating interest was proper and within its discretionary authority.

2009 Partial Settlement For The Class Members Who Transfered From PERS Plan 2 To PERS Plan 3

In 2009 the parties settled the claims brought by class members who transferred from PERS Plan 2 to Plan 3. A copy of the settlement can be found here. The settlement expressly did not resolve the claims brought by class members who transferred from TRS Plan 2 to TRS Plan 3 before January 20, 2002. The settlement did resolve the claims brought by class members who transferred from TRS Plan 2 to TRS Plan 3 after January 20, 2002. The partial settlement included the TRS claims after January 20, 2002, because the Department of Retirement Systems agreed those claims were brought within the applicable statute of limitations or deadline for filing claims.

The Remaining Teachers' Retirement System (TRS) Claims

In 2009 the Thurston County Superior Court appointed teachers Mickey Fowler and Leisa Fowler to represent the class members who transferred from TRS Plan 2 to TRS Plan 3 prior to January 20, 2002. The Superior Court rejected the Department's argument that the TRS claims prior to January 20, 2002 were barred by the statute of limitations, but it also ruled for the Department on the merits. The class appealed.

In March 2012 the Washington Court of Appeals ruled for the Fowlers and the class members they represent. The Court of Appeals held that the Department of Retirement Systems had acted arbitrary and capricious by not paying the class members daily interest on their retirement accounts. A copy of the decision can be found here.

The primary issue now remaining in the action is obtaining the appropriate relief for the class members.

Class Definition For The Remaining TRS Claims

The class includes all active and retired TRS members who transferred from TRS Plan 2 to TRS Plan 3 prior to January 20, 2002.

This webpage will be updated with information as the case progresses. Please periodically check the webpage for updates.

Status

The Notice of Settlement summarizes the proposed Settlement as of July 31, 2009

Claims Administrator

1-866-904-2636 (toll free) or
(360) 664-7960 (Olympia)

Settlement Agreement

Details regarding the settlement are found in these documents:

The Notice of Settlement summarizes the proposed Settlement. Please print it out and read it carefully. You can also obtain a copy of the Settlement Agreement by calling 1-866-904-2636 (toll free) or (360) 664-7960 (Olympia area). If you have any questions, please email the law firm. Please do not call the office.

Counsel

  • Stephen K. Strong
  • Stephen K. Festor