Oregon High Court Approves Collection of Retiree Overpayments

January 3, 2012 (PLANSPONSOR.com) - The Oregon Supreme Court has ruled the state's pension system can collect $156 million in overpayments to retirees.

The court affirmed an earlier ruling upholding the right of the Public Employees Retirement System to collect the overpayments. In a second decision, it found the retirement system did not violate the rights of members by agreeing to a settlement agreement that authorized collecting the money, the Associated Press reports.  

The two rulings end years of litigation and negotiation over the money paid to 28,000 people from 2000 to 2004. The issue arose when Marion County Circuit Judge Paul Lipscomb ruled the pension system’s board should have put more of the pension fund’s 1999 earnings into reserves instead of beefing up workers’ pension accounts (see Oregon PERS Ponders Pension Payback Details). The Oregon Supreme Court, in 2005, let that decision stand.  

The ruling affects workers who joined the system before 1996 and received pension investment earnings in their accounts for 1999. Pension accounts of those employees who still are working are to be reduced. Workers who retired from April 1, 2000, through March 31, 2004, or otherwise left public employment could have to pay back some money to the system.