More than 26,000 Washington state public school teachers have prevailed in a decades-long class action lawsuit accusing the state of skimming $120 million in interest and returns from their retirement fund.
Read more Democrat-Led States Sue Trump Administration Over Medicaid Work Requirement Rules
Just the News reports that the Thurston County Superior Court entered a final order last week, siding in favor of the teachers in their case against the Washington State Department of Retirement Systems (DRS).
The order requires the DRS to return about $120 million of skimmed interest and investment returns into the retirement accounts of current and former teachers enrolled in the state retirement plan called TRS Plan 3.
Steve Strong, attorney for the plaintiffs who originally filed the case back in 2003, explained, “The Department of Retirement Systems promised these people when they were in Plan 2, five-and-a-half percent interest calculated annually.”
According to Strong, when most teachers in Plan 2 transferred to Plan 3, they did not receive the earned interest they were promised.
The DRS had promised a 5.5% annual interest rate on their contributions but failed to transfer the full accrued interest, instead keeping the earnings to invest them secretly, the Everett Post reported.
A court filing provided to the The Center Square stated, “When the teachers transferred to TRS Plan 3 DRS was supposed to transfer the teachers’ employee contributions and accrued interest at the promised rate, but DRS did not transfer all the interest.”
Read more House Passes Bipartisan Kids’ Online Safety Bill
The federal Ninth Circuit Court of Appeals ruled in the class’s favor, saying that the Department had skimmed earned interest from the teachers’ retirement accounts going back to 1996 and kept all the earnings on the withheld interest ever since.
While the initial amount withheld in the 1990s was roughly $13 million, compounding interest over nearly 30 years drove the final payout to $120 million.
Because the case dragged on for more than 23 years, many of the teachers’ owed payments in the class action suit have passed away, or have moved and can’t be located.
Despite DRS efforts to fight the ruling and delay the conclusion of the case, last week’s final ruling from Thurston County Superior Court Judge Christine Schaller orders the DRS to put all the skimmed interest and earnings into the teachers’ TRS Plan 3 retirement accounts within 30 days.
If the DRS decides to appeal the ruling, the total judgment will continue to increase daily, accumulating at an average annualized return rate of 8.65% until the funds are officially transferred, according to the Omak-Okanogan County Chronicle.
Read more Morning Greatness: SCOTUS to Release Birthright Citizenship, Transgender Athlete Ban Decisions
