State asks court to
dismiss ERS funding suit

SHOPO has charged the state's
1998 vote to limit its fund contribution
was unconstitutional

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By Dave Segal
dsegal@starbulletin.com

The state has fired the first volley in its defense against a police officer organization's $350 million class-action lawsuit involving contributions to Hawaii's Employees' Retirement System pension fund.

Honolulu attorney Clyde Matsui, representing the state, filed a motion claiming the state was within its Hawaii constitutional rights by voting in 1998 to limit its annual contribution to the fund, which provides retirement, disability and survivor benefits for 96,000 city, county and state employees, retirees and their beneficiaries. The state is asking that the case be dismissed.

In 1998, the state said it needed the additional money to help balance the budget, but the State of Hawaii Organization of Police Officers claimed in its lawsuit that legislators violated pensioners' constitutional rights to a financially sound retirement system. The state, in its motion, said the Hawaii constitution gives it the flexibility to decide how much money is put into the pension fund as long as the pensioners are ultimately paid what they are due.

The motion is scheduled to be heard Oct. 8 by Circuit Court Judge Gary W.B. Chang.

Plaintiffs' attorney Peter Gruenstein, an Alaska-based pension specialist working for SHOPO, said he would be filing a response to the motion in "due course."

"I don't comment on pending motions during the course of a lawsuit other than to repeat the obvious that this lawsuit is about whether what the state did is constitutional," Gruenstein said.

SHOPO's lawsuit said lawmakers' shortchanged the fund by contributing $346.9 million less than it was required to between 1999 and 2001.