Tenn. County Could be Liable for $3M in Retirement Benefits Suit Appeal

April 20, 2009 (PLANSPONSOR.com) - A new estimate indicates a Tennessee county could have to come up with more than $3 million if its appeal of an adverse decision in a suit over retirement payment calculations is unsuccessful.

A news article in the Daily Herald said a state court of appeals is considering Maury County’s appeal of a 2007 ruling by state Judge Jim T. Hamilton that former county human resources director Shirley Harmon’s office “made a fatal and critical mistake” when calculating the employee benefits.

According to the news report, the $3-million figure was contained in an April 6 letter from the Tennessee Consolidated Retirement System (TCRS) and represented the first hard estimate of the impact to the county of losing its appeal of the class-action lawsuit. The letter indicated the cost of back payments would be about $366,000, and future-payment liabilities would be about $2.9 million.

The suit was filed by A.C. Howell, the county’s former budget director, and Wendell Harris, a retired sheriff’s department lieutenant and alleged the county miscalculated payments to employees who participated in the county’s retirement plan before 1999.