PERS Defined Contribution PCR Lawsuit - Wrzesien v. State

September 2016

On September 28, 2016, the Montana Supreme Court affirmed Judge Reynolds’ lower court order. The Court upheld the Plan Choice Rate (PCR) that directed a portion of employer contributions for DC and MUS-RP members to the PERS defined benefit plan, holding that it did not violate the DC and MUS-RP members’ constitutional rights to equal protection and substantive due process.

The plan choice rate liability was paid off earlier this year so the PCR is now paid directly into DC and MUS-RP members’ accounts. The Court’s decision means that previous PCR payments will remain in the DB trust fund and will not be paid to DC and MUS-RP members.

September 2015

Plaintiffs appealed the lower court’s decision to the Montana Supreme Court on September 10, 2015. A briefing schedule has not yet been issued.

August 2015

MPERA recently learned that on November 13, 2014, Judge Reynolds issued an Order on Cross-Motions for Summary Judgment granting the State’s motion. Judge Reynolds determined that neither the Plan Choice Rate (PCR) nor the legislative direction of 1% of employer contributions for DC and MUS-RP to the PERS defined benefit plan violate DC members’ constitutional rights to equal protection and due process. Thus, the PCR and the direction of the additional employer contributions to the PERS defined benefit plan will continue until certain statutory criteria are met. Plaintiffs have until mid-October to appeal this decision to the Montana Supreme Court.

August 2014

Cross motions for summary judgment are fully briefed and awaiting resolution by Judge Reynolds.

May 2014

Defendants filed a Motion For Summary Judgment on March 28, 2014. Plaintiffs filed a Cross Motion For Summary Judgment on May 23, 2014.  Consideration of class certification is pending resolution of motions for summary judgment.

October 2013

Plaintiffs filed an Amended Complaint incorporating the 1% increase in employer contributions effective July 1, 2013, upon the enactment of amendments passed by the 2013 Legislature.  Defendants filed an Answer to the Amended Complaint on October 25, 2013.   

November 2012

Edward Wrzesien and Megan Ashton filed a Complaint for Declaratory Relief from the State of Montana and the Montana Public Employee Retirement Administration in the First Judicial District Court, Lewis and Clark County in October 2012. 

The Complaint was filed individually and on behalf of all similarly situated persons and alleges that it is unconstitutional for the Defined Contribution Retirement Plan (PERS-DCRP) and the Montana University System Optional Retirement Program (MUS-ORP) (now the Montana University System Retirement Program (MUS-RP)) to withhold the Plan Choice Rate (PCR) from the employer contributions made for participants of these two retirement plans for allocation to the Defined Benefit Retirement Plan (PERS-DBRP).  The Complaint also alleges that PERS-DCRP and MUS-ORP (now MUS-RP) participants are treated unequally from PERS-DBRP participants because of the differences in allocation of employer contributions and that such unequal treatment violates the Equal Protection Clause of the Montana Constitution.  The Complaint requests certification of a class of all current and former participants in the PERS-DCRP and MUS-ORP (now MUS-RP); and a declaration that the PCR is unconstitutional and that plaintiffs are entitled to recover employer contributions withheld under the PCR.  The State filed a responsive brief on January 31, 2013. 

The matter is before Judge Reynolds and plaintiffs are represented by Travis Dye of Kalkstein, Johnson & Dye; the defendants are represented by Mike Black and Stuart Segrest of the Attorney General’s Office.