Retirement advantages case heard once more by Alaska Supreme Court docket
In this photo, taken in February 2015, Alaska Supreme Court Justice Daniel Winfree and Chief Justice Dana Fabe hear oral arguments in Peter Metcalfe v. Alaska during the first court hearing. (Photo by Matt Miller / KTOO)
The Alaska Supreme Court on Thursday heard a case that unions say could affect the pension plans of thousands of former state employees.
It is not the first time this case has been heard by the country’s highest court.
Juneau resident Peter Metcalfe said he was making college money in the early 1970s when he got a government job that involved “stamping kettles” at the Capitol. He basically worked as a chimney sweep using a four-foot brush to pull gallons of soot out of chimneys.
“I was wrapped in cloth to keep the soot away from me,” recalls Metcalfe. “I only remember standing in the Capitol fountain with the sun shining and sweat running down my face, and I’m sure I was all black. I thought ‘I have to be somewhere else.’ “
After only a few weeks, Metcalfe left town to try his hand at commercial fishing.
Metcalfe said he really didn’t get it at the time, but had he stayed in the state he could have been taken on as a Level I employee.
These Tier I benefits are known to be generous. These included a defined benefit retirement plan, cost of living adjustments, and family medical insurance upon retirement at age 55.
“A gold chain in Juneau with ‘Tier I’ on it, everyone loves you!” said Metcalfe’s attorney Mark Choate with a laugh. “You know you are the object of desire because it’s such a great pension system.”
These advantages – this “gold chain” – are no longer available to new civil servants.
Metcalfe didn’t work for the state again. But the crux of the matter is what would happen if he wanted to do that now.
In the early 1980s, he triggered his retirement account. But by then he could have paid his pension back and returned to work as a Level I employee.
He can’t do that now. If he went back to work for the state, he would get a new type of pension that is not as generous as his original plan.
In 2005, the legislature ended membership in all defined benefit pension plans and introduced the new defined contribution Tier IV plan.
“It just felt like Fiat was making laws,” Metcalfe said. “In other words, the governor and the legislature, the ruling party had majorities in both houses and the governor was Republican and they just got it through.”
Metcalfe believes this is against the Alaskan Constitution. In particular, he refers to Article XII, Section 7, which states that a worker’s pension must never be reduced and that membership of a pension plan is a contractual relationship with the state.
In this photo taken in February 2015, attorneys from left, Mark Choate, Jon Choate, and Kevin Wakley, along with Larry Davis of the Alaska Division of Retirement and Benefits, are preparing for a hearing in the Alaska Supreme Court in Juneau. (Photo by Matt Miller / KTOO)
Oral arguments before the judges on Thursday should focus on the interpretation of the pension benefits section of the Constitution and whether it is unconstitutional to deny Metcalfe’s potential pension benefits.
Prosecutors refused to do a taped interview for this story. But they argued before the Alaska Supreme Court five years ago that Metcalfe finally ended his contractual relationship with the state when he paid off his retirement. They also said he waited too long to file a lawsuit.
Two incumbent judges have withdrawn because of a possible conflict of interest.
Two former judges, Dana Fabe and Warren Matthews, came out of retirement to hear and rule the case.
The Alaska Supreme Court usually delivers an opinion 6-12 months after oral arguments.
State workers’ unions have stated that a decision in favor of Metcalfe could also affect up to 85,000 former workers who may wish to return to a state job and be carried over into their previous retirement plans.
