Jim Lees
CHARLESTON - More than 600 angry teachers have called Charleston attorney Jim Lees regarding a pending switch between two state teacher retirement plans.
He only needed one.
Lees said he plans to file Petition for Declaratory Judgment this week in Kanawha Circuit Court in an effort to overturn the results of a statewide vote among teachers who had to decide between retirement plans.
"We've had well over 600 calls," Lees said. "The reality is you do not have to be on the Declaratory Judgment to be affected by it. I really only needed a few representatives."
Teachers were told to choose between an old system - a defined benefits plan - where retirement funds were provided and managed by the state and the newer system - a defined contribution plan - where retirement funds were contributed by the state and managed by the individual.
A vote of about 12,700 of nearly 23,000 eligible voters determined the older system would be put back into place, thanks to a majority vote of 62 percent.
But before the vote ever took place, a Harrison County teacher contacted Lees about the possibility of taking legal action. Lees advised that he had to wait until the vote actually happened before he could have a gripe with it.
Once the vote occurred, Lees' name began to filter among the teachers as someone who would look into the matter and represent those who stood to lose thousands of dollars.
"I don't mind taking it on," Lees said. "I think it's a very interesting legal issue, and those people who don't want to go back to the defined benefits plan have a good argument. Last time I checked we live in a capitalistic society.
"I'm not sure you how can argue for taking the money a person has managed over the years."
Lees, of the firm Hunt and Lees, was hired as the state Legislature's special prosecutor in the impeachment trial of Treasurer A. James Manchin almost 20 years ago when $273 million in state investment funds were lost. He's had an unsuccessful run at becoming Governor since then and is currently running for state Senate.
"But if you're asking if I'm some sort of pension lawyer, the answer is 'no,'" Lees said.
Still, that's where Lees now finds himself as he tries to sort through the figures and question the legality of it all.
His two main problems with the new policy are:
- The state Legislature drew up the policy then had a specific group of citizens (teachers) vote on it. He compared it to the Legislature creating a law regarding the death penalty, then having people ages 40-50 vote on whether to pass it rather than the Legislature voting itself.
"If they can do this, then what did we elect the legislators for? Where does it say they are free to delegate law-making ability to a small group of people?" he asked;
- And those who profited from the new system that allowed a teacher more freedom with his or her retirement fund now have to split their money with those who didn't fare so well. He said a person who established $75,000 in his or her retirement fund will have to dump that money into one giant fund (estimated at $645 million) to be split equally among the state's more than 20,700 individual accounts.
The financial merger is set for July 1, though Lees plans to file a Petition for Injunctive Relief along with the Declaratory Judgment so that, he says, the status quo will be kept until the matter is resolved.
"They've been operating under this system since 1991," Lees said. "Another two months isn't going to matter."
Lees feels that a solution can be reached as long as those he is representing are given the opportunity to keep the money they've accumulated in their retirement funds.
"Simply give people the option," he said. "Let them take their money and roll it over into the defined benefits plan, or let them put it into an (Individual Retirement Account) or another retirement mechanism.
"In other words, don't force them to put their money back into one retirement plan."
With the filing of the petition, $645 million will be in a Circuit Judge's hands.
"I've never heard of another state or a private system ever trying to take assets in a defined contribution plan and force them back into a defined benefit plan without the approval of the people who have those assets," Lees said.
"It's not the easiest thing. Hopefully the court will straighten it out."