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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Alford v. State, Dept. of Administration, Div. of Retirement and Benefits (10/16/2008) sp-6315
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| YVONNE ALFORD, BRUCE | ) |
| CAMPBELL, DICK CHITTY, | ) Supreme Court No. S- 12644 |
| PATRICK RYAN, RAMON | ) |
| SHUMWAY, SCHUYLER STEVENS, | ) Superior Court No. 3AN-05- 11441 CI |
| EVADINE TURNER, CHERYL | ) |
| WILSON, and LOIS WIER, | ) |
| ) | |
| Appellants, | ) |
| ) | |
| v. | ) O P I N I O N |
| ) | |
| STATE OF ALASKA, | ) No. 6315 October 16, 2008 |
| DEPARTMENT OF | ) |
| ADMINISTRATION, DIVISION OF | ) |
| RETIREMENT AND BENEFITS, | ) |
| ) | |
| Appellee. | ) |
| ) | |
Appeal from the
Superior Court of the State of Alaska, Third
Judicial District, Anchorage, Peter A.
Michalski, Judge.
Appearances: Donna C. Willard, Law Offices
of Donna C. Willard, Anchorage, for
Appellants. Virginia B. Ragle, Assistant
Attorney General, and Talis J. Colberg,
Attorney General, Juneau, for Appellee.
Before: Fabe, Chief Justice, Eastaugh,
Carpeneti, and Winfree, Justices. [Matthews,
Justice, not participating.]
WINFREE, Justice.
I. INTRODUCTION
The appellants (early retirees) are members or
surviving beneficiaries of members of the Public Employees
Retirement System (PERS) who took early retirement before 1977,
returned to work in public service, and later retired again.
Asserting constitutional and statutory violations and
unreasonable statutory interpretation, they now contest the
manner in which the Division of Retirement and Benefits (the
Division) calculated their retirement benefits, including the
Divisions decision to recapture pension benefit payments made
during their early retirement.
We conclude that the Divisions methodology (1) did not
violate the anti-diminution provision of article XII, section 7
of the Alaska Constitution; (2) did not violate AS 39.35.520(b)s
prohibition against adjustments; and (3) was reasonable. We
therefore affirm.
II. FACTS AND PROCEEDINGS
A. Facts
Calculation of PERS benefits when a public employee
retires, returns to work, and then retires again is governed by
AS 39.35.150. Since July 1, 1977, subsection .150(a) has
provided that upon subsequent retirement, an employee is entitled
to receive an additional pension based on the credited service
and average monthly compensation earned during the period of re-
employment.1 The second pension is added to the reinstated
pension for the previous employment period.2
Before July 1, 1977, AS 39.35.150 consisted of two
subsections.3 Former subsection .150(a) provided:
(a) If a retired employee is re-employed on a
regular full-time basis by an employer, no pension
payments may be made during the period of re-
employment. During the period of re-employment,
deductions from salary may be made at the option
of the retired employee for contributions to the
retirement fund as provided in sec. 160 of this
chapter. Upon the subsequent retirement of the
retired employee, he is entitled to receive a
pension based on his credited service and
compensation before the date of his previous
retirement. If a previously retired employee
makes contributions to the fund during his re-
employment, his additional credited service and
compensation during the period of re-employment
shall be included to determine his final
retirement benefit.[4]
Former subsection .150(b) dictated how the Division should
account for early retirement benefits previously received by a
retiree:
(b) In the case of re-employment of an
employee who retires under sec. 370(c) [normal
retirement] or 380 [early retirement] of this
chapter, the pension payable upon the employees
subsequent retirement shall be reduced by the
actuarial equivalent of early retirement benefits
previously received by the employee.[5]
Actuarial equivalent was then defined as:
equality in value of the aggregate expected
payments under two different forms of pension
payments, considering expected mortality and
interest earnings on the basis of tables adopted
from time to time by the board.[6]
In 1980 the Attorney Generals office issued an opinion
stating that the July 1, 1977 amendment changed the clear meaning
of AS 39.35.150 and advised the Division to calculate retirement
benefits differently depending on the employees re-employment
date. For retired members re-employed after July 1, 1977, the
Division was advised to apply the new law to calculate pension
benefits. For retired members re-employed before July 1, 1977,
the Division was advised to calculate a single pension based upon
the total years of credited service, using the average monthly
compensation for the entire period as defined in AS 39.35.680,
reduced by the actuarial equivalent of benefits received under an
earlier pension, as provided by AS 39.35.150 before the 1977
amendment.7
In 1981 the Attorney Generals office affirmed its
earlier opinion. The same year, we decided Hammond v. Hoffbeck,
clarifying PERS members constitutional rights under article XII,
section 7 of the Alaska Constitution.8 We held there that an
employees constitutional right to retirement benefits under PERS
vests immediately upon an employees enrollment in that system,
and that changes in the retirement system that disadvantage
employees must be offset by comparable new advantages.9
Throughout the 1980s and 1990s, the Division continued
to calculate second retirees benefits by applying the newly
enacted section .150. The Attorney Generals office issued a
third opinion in 1999, advising the Division to calculate
benefits in accordance with its 1980 and 1981 decisions, as well
as Hammond. In short, the Attorney General advised the Division
to apply former section .150 when calculating the second
retirement benefit for any member who had been in the PERS system
before July 1, 1977, if doing so would result in a more favorable
benefit for the retiree.
The Division later identified more than one hundred
potentially affected second retirees or surviving beneficiaries.
To determine which version of section .150 would result in a more
favorable benefit to them, the Division calculated benefits under
both the pre- and post-amendment statutes. But because the
Division had been calculating benefits under the new law for more
than twenty years, it did not have any guidelines in place to
apply subsection .150(b) of the old law. Based on the statutes
plain meaning, the Division interpreted the phrase reduced by the
actuarial equivalent of early retirement benefits previously
received to include all the benefits that they received under the
early retirement provision up to the date that they went back to
work. When the Division used this method, it found that few
early retirees would receive increased benefits because they had
been retired with an early benefit for so long that the actuarial
reduction wiped out any increase they would have received.
Because the plain meaning application often failed to
yield an advantageous result for members, the Division chose
instead to apply the old law liberally in the second retirees
favor by calculating the early retirement component as the amount
[the retiree] received while in early retirement status until
reaching age 55, the normal retirement date.10 Under this
approach, the Division first calculated the second retirees
benefits under subsection .150(a), then reduced their monthly
pension payments only by the amount of early retirement benefits
they received before reaching age fifty-five. This resulted in a
monthly payment larger than the payment calculated under the new
law.
The Division offered to pay the second retirees the
back payments and additional ongoing benefits resulting from the
recalculation, but because of a potential statute of limitations
defense, it conditioned payment on the recipients waiver of any
claim to interest on the back payments. Affected retirees
litigated the waiver requirements. The superior court ruled that
the waivers were defective and voidable, any of the retirees
could seek to void the waiver, but the Division then could assert
its statute of limitations defenses.11 The Division agreed to pay
the interest and the parties settled the litigation. The
settlement agreement required class members to pursue pension
calculation disputes within two years of October 21, 2002.
The Division awarded each eligible second retiree or
surviving beneficiary a lump sum payment or an actuarially
increased benefit as compensation for past underpayments,
interest, and increased benefits. Each also received an
increased monthly benefit going forward. But, as required by
subsection .150(b), the Division also began recapturing
retirement benefits disbursed to those who originally had taken
early retirement, including the early retirees in this case. As
a result, while the early retirees received an increased benefit
from the recalculation of the retirement benefit for their second
round of employment, their original monthly benefits also were
decreased to some extent to account for the actuarial equivalent
recapture requirement of subsection .150(b).
The early retirees contacted the Division in May 2003
in an attempt to avoid subsection .150(b)s recapture requirement.
The Commissioner ultimately rejected the early retirees arguments
and denied their request to be exempted from the recapture
requirement. In November 2003 the Division granted the early
retirees permission to appeal to the Board.
B. Proceedings
In early September 2004 the early retirees presented
several arguments to the Board in support of their contention
that they should not be subject to the former subsection .150(b)
recapture requirement. They argued that the recapture:
(1) violated the anti-diminution provision of Article XII,
section 7 of the Alaska Constitution; (2) violated AS
35.39.520(b), which prohibits the Division from making certain
adjustments to a retirees pension; and (3) impinged on their
vested right to elect early retirement under article XII, section
7 of the Alaska Constitution and Hammond v. Hoffbeck. They also
made other arguments in favor of waiving the recapture
requirement, including an allegation that the Division breached
its fiduciary duty by initially miscalculating their pensions and
failing to advise them of the effects of early retirement on
their pensions. Finally, they maintained that they were entitled
to hardship waivers of the recapture under AS 39.35.522.
In late December 2004 the Board upheld the Commissions
decision, concluding that although Hammond mandates that a
retiree is entitled to the best benefits system available during
the retirees tenure in a PERS-covered position, it does not
permit a retiree to choose among the most advantageous provisions
of each applicable system. The Board therefore decided that the
early retirees were entitled to the more advantageous of the new
law or the old law, not a combination of the two. The Board also
concluded that the subsection .150(b) recapture requirement was
not an impermissible adjustment within the meaning of subsection
.520(b), and that the Divisions mathematical and actuarial
methodology for calculating recapture of early retirement
benefits was reasonable.
The early retirees appealed to the superior court,
which affirmed the Boards decision in February 2007. The early
retirees now appeal from the superior courts decision.
III. STANDARD OF REVIEW
When the superior court acts as an intermediate court
of appeal in an administrative matter, we independently review
and directly scrutinize the merits of the boards decision.12 When
reviewing constitutional questions, we apply our independent
judgment.13 We also exercise our independent judgment when we
review questions of law that do not involve agency expertise.14
In exercising our independent judgment, we adopt the rule of law
that is most persuasive in light of precedent, reason, and
policy.15
We review questions of law involving agency expertise
by applying the reasonable basis test under which we defer to the
agencys statutory interpretation unless it is unreasonable.16 We
review administrative factual findings to ensure they are
supported by substantial evidence.17 Substantial evidence is
such relevant evidence as a reasonable mind might accept as
adequate to support the Boards conclusion.18
IV. DISCUSSION
A. The Divisions Methodology Did Not Violate the Anti-
Diminution Provisions of Article XII, Section 7 of the
Alaska Constitution.
Article XII, section 7 of the Alaska Constitution
provides that [m]embership in employee retirement systems of the
State or its political subdivisions shall constitute a
contractual relationship. Accrued benefits in these systems
shall not be diminished or impaired.19 It also mandates that no
law impairing the obligation of contracts . . . shall be passed.20
In Hammond v. Hoffbeck, employees who entered the PERS
system before 1976 contested the constitutionality of a 1976
statutory amendment reducing the amount of, and eligibility for,
disability and death benefits under PERS.21 We held that: (1) an
employees constitutional right to retirement benefits under PERS
vests immediately upon an employees enrollment in that system;22
(2) changes in the retirement system disadvantaging employees
must be offset by comparable new advantages;23 and (3) an employee
must be allowed to choose which system he or she desires to come
under if the state does not provide an offsetting advantage.24 We
concluded that the 1976 amendment disadvantaged some employees
rights to the best death and disability benefits available but
did not provide any offsetting advantages.25 Because
determination of whether vested benefit rights have been
diminished must be made on a case-by-case basis by each affected
individual rather than by the state,26 we directed the state to
give the affected employees notice and a reasonable time to
choose which system they desire[d] to come under.27
In Sheffield v. Alaska Public Employees Association, we
considered whether the Board properly calculated the appellants
early retirement benefits using actuarial factors adopted by
regulation after they started working for the state, when doing
so reduced the amount of early retirement benefits compared to
payments calculated under the actuarial factors effective when
they were initially hired.28 We affirmed the superior courts
decision that article XII, section 7 of the Alaska Constitution
prohibited the reduction in benefits.29 We held that Hammond did
not limit the requirement of offsetting advantages to changes in
the PERS system effected by the legislature; rather, the contract
an employee enters into with the state for benefits encompasses
the practical effect of the whole complex of provisions.30
We reaffirmed the rule that a determination of whether
vested rights to benefits have been diminished must be made on a
case-by-case basis and accompanied by corresponding advantages to
that employee.31 As in Hammond, we stated that the decision
ultimately rested with the employee: If the PERS board
repeatedly revises the tables during the course of an employees
employment, we think the employee should be permitted to elect
which of those tables will apply to the computation of his or her
PERS early retirement benefits.32
The early retirees first argue that Hammond and
Sheffield mean that they may pick and choose among statutory
provisions to obtain the best combination of benefits. They
point to the portion of the Boards decision that states: [Article
XII, section 7 of the Alaska Constitution] has been interpreted
by the Alaska Supreme Court to preclude subsequent diminutions in
benefits. A corollary to this principle is that an
employee/retiree is entitled to the best benefits under PERS that
arise during an employees career following the initial hire into
a position held by PERS. The early retirees interpret the best
benefits under PERS that arise during an employees career very
broadly to include any conceivable combination of factors, giving
them the ability to pick and choose among the subsections of the
various versions of section .150 in effect during their state
service.
The early retirees also argue that the mathematical
calculations the Division used to determine their pension
payments resulted in a reduced pension benefit, violating article
XII, section 7. Specifically, they assert that they are entitled
to actuarial equivalence between their early (first) retirement
and normal (second) retirement pensions, and that in
recalculating their pensions under former subsection .150(b), the
Division failed to meet that requirement. The early retirees
present their own actuarial equivalence calculations using
appellant Schuyler Stevenss pension as an example. Based on
their math, Stevens now receives a base pension amount less than
what he would have received if he had stayed retired and never
returned to work. They argue that the Division never adequately
explained how it arrived at the early retirement adjustment that
it calculated for each of them and question the manner in which
the state arrived at the early retirement factor.
The Division argues that the case law interpreting
article XII, section 7 of the Alaska Constitution does not
entitle the early retirees to pick and choose among the
provisions of former AS 39.35.150 when invoking the right to have
that statute applied to the calculation of their benefits. It
asserts that former subsections .150(a) and (b) are not severable
from one another; rather, if the appellants demand the benefits
of former subsection .150(a), they also must accept the costs
inherent in the application of former subsection .150(b). The
Division argues that it adequately explained its benefit
calculations in letters and in worksheets provided to the
appellants, by making the Divisions actuarial consultant
available to the appellants, and through testimony at the hearing
before the Board.
We conclude that application of the recapture
requirement of subsection .150(b) does not result in an
unconstitutional diminution of benefits. Hammond and Sheffield
direct that PERS members are entitled to the best benefits
available and that they are entitled to choose those benefits
for themselves but are not so broad as to allow members to sever
statutory provisions from one another and mix and match some or
all of a statutory provision from one era with that of another.
The early retirees additional retirement benefits under former
subsection .150(a) were diminished only to the extent that the
Division accounted for repayment of early retirement benefits
under former subsection .150(b). They still enjoy a net increase
over what they would receive under the new version of AS
39.35.150. The Board therefore properly declined to sever and
disregard subsection .150(b) when calculating retirement benefits
under former AS 39.35.150. We affirm the Boards decision in this
regard.
We also conclude that the Divisions calculations were
reasonable. Because the meaning of actuarial equivalent falls
within the unique expertise of the PERS Board,33 we review the
Boards decision under the reasonable basis test. The Board
concluded that the mathematical and actuarial methodology that
the Division used when it calculated the recapture of early
retirement benefits was reasonable. The Board noted that the
definition of actuarial equivalent or actuarial adjustment was
not a model of clarity,34 but that it was persuaded that the
Division had rendered a reasonable interpretation. It also noted
that the Divisions interpretation equalized early retirement with
normal retirement receipts and employed both a mortality table as
well as an interest factor. In contrast, the early retirees
proposed calculations admittedly were approximate and did not
include a factor to account for post-retirement pension
adjustments. Moreover, the interpretation that the Division
ultimately adopted defining early retirement as the time between
the age at which the person took early retirement and reached age
fifty-five favored the early retirees.
The Divisions calculations were supported by and based
on a quantifiable mathematical basis: actuarial equivalence,
interest, and mortality. The Division applied a definition of
actuarial equivalent that favored the early retirees. The plain
meaning application required the Division to recoup nine to ten
years of early retirement benefits from some of the early
retirees while the Divisions interpretation required it to recoup
approximately four years of benefits in the most severe case.
The Divisions interpretation of actuarial equivalent is not
unreasonable given these facts. We affirm the Boards decision on
this issue.
B. The Division Did Not Violate Subsection .520(b)s
Prohibition Against Adjustments by Applying Former
Subsection .150(b); Therefore, an Undue Hardship Waiver
Was Inappropriate.
Former AS 39.35.520, in effect when the early retirees
took final retirement and the Division recalculated their
benefits, governs adjustments of a PERS members benefit payments
when an error is made in computing a benefit and the member
received more or less than the amount to which he or she was
entitled. It provides that as far as practicable, future
payments shall be adjusted so that the actuarial equivalent of
the pension or benefit to which the employee or beneficiary was
correctly entitled shall be paid.35 It thus requires PERS members
to repay funds that they received but to which they were not
entitled.36 But under former subsection .520(b), downward
adjustment to recover benefits cannot be made if:
(1) the incorrect benefit was first paid two years
or more before the member or beneficiary was
notified of the error;
(2) the error was not the result of erroneous
information supplied by the member or beneficiary;
and
(3) the member or beneficiary did not have
reasonable grounds to believe the amount of the
benefit was in error.[37]
Former subsection .520(d) requires a member who owes
the system money to pay interest on the amount owed if it is the
result of erroneous information supplied by the member or
beneficiary, or the member or beneficiary had reasonable grounds
to believe the amount of the benefit was in error.38 Former
subsection .522(a) permits the Board to grant a member a waiver
of adjustments if the adjustment will, in the Boards opinion,
cause the member undue hardship and if the circumstances satisfy
several other criteria.39
In this case, the Board concluded that although the
former subsection .150(b) recapture requirement reduced the early
retirees monthly pensions, it was not an adjustment prohibited by
subsection .520(b) because it was merely the result of
application of the old law:
[T]he only adjustment to the extent that a
recalculation occurred was the computation made
under Old Law AS 39.35.150 pursuant to the
settlement in the Turner case. Payments made to
the appellants included application of Old Law
subsection (b) provision relating to early
retirement benefits. The fact that subsection (b)
provided a lower amount to the appellants as a
consequence of the Divisions application of AS
39.35.150 in its entirety does not constitute a
further adjustment within the meaning of AS
39.35.520 nor is it barred by AS 39.35.520. The
Division is not seeking to adjust the Old Law
payouts made; rather the issue is the base
computation under Old Law AS 39.35.150.
The early retirees argue that the Division made two
adjustments to their pension payments within the meaning of
subsection .520(b): one when it recalculated their pensions under
former subsection .150(a), and the other when it reduced their
pensions under former subsection .150(b) to account for the early
retirement benefits they received. They assert that even if
subsection .150(b) applies to them, subsection .520(b)s two-year
statute of limitations bars the state from recovering the early
retirement benefits it disbursed to them no later than 1988.
Alternatively, the early retirees argue that even if the
subsection .520(b) statute of limitations does not bar former
subsection .150(b)s recapture requirement, the Board should have
waived the recapture under former subsection .522(a) because it
posed an undue hardship.
The early retirees further argue that even if the
Division properly reclaimed their early retirement benefits,
subsection .520(d) precludes the Division from charging them
interest on the disbursed early retirement benefits. They
contest the inclusion of a seven percent interest rate in the
actuarial calculations used to arrive at the amount of early
retirement funds owed to the Division. Finally, they contend
that they should have been given an opportunity to pay off the
early retirement indebtedness in a lump sum to avoid paying
interest.
The Division argues that section .520 applies to
recovery of benefits only when the PERS system has overpaid a
members benefit as a result of changes or errors in records,
contributions, or benefit computations. It claims that the early
retirees monthly benefits increased simply because of the former
subsection .150(a) recalculation, and therefore section .520 does
not apply. The Division further counters that it considered only
gross early retirement benefits, without interest, in determining
the amount of early retirement benefits subject to former
subsection .150(b)s recapture requirement. Regarding the
interest rate included in the actuarial calculations, the
Division responds that it used the most advantageous factors in
effect during the appellants employment, and that the basis for
actuarial factors is derived from 2 Alaska Administrative Code
(AAC) 35.329, which explains the basis of the assumptions for
the reduced benefit actuarial adjustment factors from the
relevant periods, and sets the interest rate at six percent.40 It
concludes that members receive the benefits due them when it
applies an actuarial factor that is based on mortality
information and an interest assumption.
We conclude that the recalculation of member benefits
under subsection .150(a) was not an adjustment triggering
subsection .520(b). Assuming for the sake of argument that the
Division erred when it calculated pensions during the 1980s and
1990s using the new law, and that the early retirees therefore
incorrectly received lower pension payments, the error was
corrected as required by subsection .520(a) when the Division
recalculated their benefits under the old law. Once the Division
applied subsection .150(a) to recalculate the early retirees
pensions, it was neither a change or error in the records
maintained by the system, nor an error [] made in computing a
benefit when the Division applied subsection .150(b) to account
for early retirement benefits already paid. Rather, the
application of subsection .150(b) was merely the natural
extension of applying former subsection .150(a). The Board
correctly concluded that the changes resulting from the
application of former section .150 were not an adjustment that
required the recovery of benefits under subsections .520(a) and
(b).
We also conclude that the early retirees interest
arguments are unavailing; no evidence suggests that the Division
imposed interest based on subsection .520(d). Before the Board,
the Division explained that it calculated the amount of early
retirement benefits received by each appellant up to age fifty-
five without including interest, but that an interest assumption
was embedded in the actuarial factor applied to that amount to
determine the final ongoing monthly benefit. Division Retirement
Manager Kathy Lea stated that it was a standard actuarial
practice to embed seven percent interest in the actuarial factor
to reflect the time value of money; 2 AAC 35.329 dictates the
interest rates and guidelines for the actuarial calculation. For
these reasons, we conclude that the Division reasonably
incorporated an interest factor into the calculations used to
determine the early retirees monthly early retirement recapture
indebtedness.
Finally, the early retirees maintain that several
inequitable factors required the Board to waive the application
of subsection .150(b). They contend that a subsection .150(b)
waiver is justified because of: (1) the effects of early
retirement recapture on their federal income taxes; (2) the fact
that they did not receive pension payments while they were re-
employed; (3) the unjust enrichment of the retirement system, and
(4) the harm visited on them because the Division did not advise
them of the ramifications of returning to work. Because we have
held that the application of former subsection .150(b) is not an
adjustment under subsection .520(a), the early retirees are
therefore not entitled to an undue hardship waiver under section
.522. We affirm the Boards conclusion that a waiver is not
appropriate in the early retirees case.
C. The Early Retirees Remaining Claims Are Not Properly
Before Us.The early retirees argued to the Board, and
now argue to us, that the Division breached its
fiduciary duty to them by failing to advise the early
retirees of the nature and effect of the Divisions
calculations. The Board stated it was without
jurisdiction to provide damage relief to the
appellants,41 and neither the Board nor the superior
court addressed this claim. The early retirees do not
argue that they can be awarded damages in these
proceedings, but suggest the alleged breach of
fiduciary duty during the Divisions calculations caused
them financial harm through adverse tax consequences.
The early retirees retain the right to seek damages in
a separate suit before a court with proper
jurisdiction.
Appellants Yvonne Alford and Evadine Turner also raise
independent arguments not directly related to the section .150(a)
recalculation, but related to other components of the calculation
of their retirement benefits. The record regarding their
individual claims is not developed, nor is there any decision or
ruling regarding them from which to appeal. Their claims are not
properly before us,42 but they also retain the right to pursue
their claims in an appropriate forum.
V. CONCLUSION
We AFFIRM the Boards denial of the early retirees
claims.
_______________________________
1 AS 39.35.150(a) (1977).
2 Id.
3 Former AS 39.35.150 (1974).
4 Former AS 39.35.150(a) (1974) (emphasis added).
5 Former AS 39.35.150(b) (1974).
6 Former AS 39.35.680(1) (1960). The definition now
appears in AS 39.35.680(2) and is substantively the same, but has
been re-titled actuarial adjustment.
7 The State of Alaska Public Employees Retirement System
Board adopted this interpretation in its November 1980 decision,
In the Matter of the Appeal of Walter L. Kubley.
8 Hammond v. Hoffbeck, 627 P.2d 1052, 1056-57 (Alaska
1981); see also Sheffield v. Alaska Pub. Employees Assn, Inc.,
732 P.2d 1083, 1085 (Alaska 1987).
9 Hammond, 627 P.2d at 1056, 1057; see also Sheffield,
732 P.2d at 1085 (holding that the state cannot make changes to
the retirement system that will diminish a members benefits
without providing an offsetting advantage).
10 The applicable statute provided that early retirement
age was fifty. See former AS 39.35.380 (1975).
11 Turner v. State of Alaska, Dept of Admin., Div. of Ret.
& Benefits, No. 3AN-01-06171 Civ. (Alaska Super., April 2, 2002).
12 Alyeska Pipeline Serv. Co. v. DeShong, 77 P.3d 1227,
1231 (Alaska 2003).
13 McMullen v. Bell, 128 P.3d 186, 190 (Alaska 2006).
14 Id.; see also Lopez v. Admr, Pub. Employees Ret. Sys.,
20 P.3d 568, 570 (Alaska 2001) (Questions of law not involving
agency expertise are reviewed under the substitution of judgment
standard.).
15 Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979).
16 Lopez, 20 P.3d at 570.
17 Alyeska Pipeline, 77 P.3d at 1231.
18 Lopez, 20 P.3d at 570 (citation omitted).
19 Alaska Const. art. XII, 7.
20 Alaska Const. art. I, 15.
21 Hammond, 627 P.2d at 1053-55, 1059.
22 Id. at 1057.
23 Id.; see also Sheffield, 732 P.2d at 1085 (holding that
the state cannot make changes to the retirement system that will
diminish a members benefit without providing an offsetting
advantage).
24 Hammond, 627 P.2d at 1058-59.
25 Id. at 1059.
26 Id.
27 Id. at n.13.
28 Sheffield, 732 P.2d at 1084.
29 Id. at 1084, 1089.
30 Id. at 1087 (citation omitted).
31 Id. (emphasis in original).
32 Id. at 1089 n.13.
33 See former AS 39.35.040 (listing Boards powers and
duties when it heard appellants case). The Board has since been
abolished. See Ch. 9, 132, SLA 2005.
34 See former AS 39.35.680(1) (1960).
35 Former AS 39.35.520(a) (1960).
36 Id.
37 Former AS 39.35.520(b) (1984).
38 Former AS 39.35.520(d) (1986).
39 Former AS 39.35.522(a) (1980).
40 2 AAC 35.329(c), (d) (2007).
41 The powers and duties of the PERS Board are defined in
former AS 39.35.040, which did not permit the Board to consider
breach of fiduciary duty claims. See former AS 39.35.040 (2004).
42 This court ordinarily will not consider an issue raised
for the first time on appeal. McMullen, 128 P.3d at 190.
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