LITTLE ROCK — Three elected county officials are attempting to appeal a decision by the Arkansas Public Employees Retirement System to cut off their pension benefits, even though the system’s attorney says they missed a deadline for filing notices of the appeals.
Garland County Circuit Clerk Vicki Rima, Garland County Assessor Brenda Short and Woodruff County Treasurer Marlene Hite are among six elected officials whose benefits were cut off in May after the retirement system found that they had failed to meet a requirement that they “terminate” employment before receiving benefits.
Instead of vacating their offices, the officials merely took themselves off county payrolls for a required three month period, in at least some cases while continuing to perform their duties. The officials then returned to the payrolls, receiving pensions in addition to their salaries.
Employees whose retirement benefits are cut off by retirement system Director Gail Stone can appeal the decision to the system’s Board of Trustees. Until last month, however, the system’s regulations didn’t give a deadline for when the appeal could be filed. On Aug. 18, the board adopted a regulation specifying that an appeal must be filed within 30 days after the decision is made.
Jay Wills, an attorney for the retirement system, said the regulation gave the officials 30 days from the day it was passed to appeal the termination of their benefits. The deadline expired on Friday, he said.
Within hours of learning of Wills’ interpretation from a reporter on Monday afternoon, attorney Denise Hoggard of Little Rock filed notices of appeal on behalf of Rima, Short and Hite.
She said she had expected the system to send written notices informing her clients of the new regulation, and that the deadline would be 30 days after the officials received the notices.
She added that she be-lieves the board improperly adopted the regulation without allowing for the opportunity for public comment and legislative review called for in the state’s Administrative Procedures Act. Instead, the regulation was passed with an emergency clause allowing it to take effect immediately.
“It’s unfair to pass a rule under an emergency clause that applies to these people that you have identified, and not to give them notice,” Hoggard said.
Wills responded that no notice was required, noting that Hoggard was at the meeting when the regulation was adopted.
“I’m not aware of anything in the administrative procedures act that says we had to give specific notice of adopting a regulation to any of Denise’s clients,” Wills said.
In order for the appeals to be considered, Wills said the Board of Trustees would have to agree to waive the deadline. If the deadline is not waived, Hoggard said her clients would appeal directly to circuit court.
Under the Administrative Procedures Act, an agency can adopt an emergency regulation if it finds there is an “imminent peril to the public health, safety, or welfare.”
Asked what emergency prompted the regulation establishing the 30-day deadline, Wills said the rule was needed to correct a gap in the system’s regulations.
“It was to move us off dead center with respect to anybody that wished to appeal from any of Gail’s administration decisions,” Wills said.
Rima, Short and Garland County Treasurer Jo West Taylor have confirmed that they took themselves off the county payroll for three months in 2008 but continued to perform the duties of their office. Hite has said she did the same thing last year.
Desha County Assessor Gaye Brown has said she took herself off the payroll for three months in 2006. Desha County Circuit Clerk Skippy Leek retired at the same time as Brown, but has not returned calls seeking comment about whether he continued to work during his retirement.
While the retirement system has not released names, all six officials have confirmed that their benefits were cut off in May. The notices filed Monday bring to five the number of officials who have said they plan to appeal.
West Taylor, who was defeated in the Democratic primary in May by State Sen. Terry Smith, announced her decision to appeal in July. A hearing on the appeal is set for Sept. 29.
Attorney Charles Gibson of Dermott, who represents Leek, notified Wills of his client’s plan to appeal earlier this month, Wills said. A hearing on Leek’s appeal hasn’t been set. Wills said he had not received any other notices of appeal.
Brown said in May that she didn’t know whether she would appeal. She could not be reached by phone on Monday. The system is also continuing to review the retirements of three other elected officials and has not decided whether to cut off their benefits.
Hoggard, who also represents West Taylor as well as Rima, Short and Hite, said her clients plan to argue that they acted on advice from retirement system staff and should not be penalized.
If the board disagrees, Hoggard said the officials want the option of paying back the benefits they’ve received, having their benefits recalculated and retiring a second time.
Wills has said that that option would result in a financial gain for some officials, in part because elected officials receive two years of service credit for every year they work. The officials could also withdraw up to five years of benefits in a lump sum. In most cases, that amount would more than offset what the officials owe, Wills has said.
Hoggard said she doesn’t know whether Taylor would benefit financially from having her benefits recalculated, adding that that isn’t the reason she wants the opportunity to pay back the benefits she’s received.
Taylor “wants to do what is right,” Hoggard said. “If they’re now telling her that she did something wrong, she wants to go back into the system to tender the money back and be treated like any other retirant.”
Retirement system officials initially said they would be demanding repayment of any benefits the officials had received, but the demand was dropped in May. Wills cited Arkansas Code Annotated 24-4-207, which prohibits the system from recouping money that a retiree has been receiving for more than a year “unless the overpayment is the result of an error on the part of the member, retirant or beneficiary.” The system’s current position is that, once the officials step down from their jobs, the benefits will start again at the same level as when they were cut off.
Recalculating an official’s benefits, Wills said Monday, would require the board’s approval. That, he added, would likely also require the county where the officials works to make up for tens of thousands of dollars in contributions it would have made had the retirement never occurred.
State Rep. Allen Kerr, R-Little Rock, who called attention to the retirements by requesting an attorney general’s opinion on the subject last year, said he would support such an option, which the system has said would result in most cases a slight financial gain to the retirement system.
“If we say they took it in error or wrongly somehow, then the first thing you would expect is we’d want our money back,” Kerr said. “As long as they follow the rules from here on out, I don’t see a problem with it.”
Front Section, Pages 1 on 09/21/2010