The revocation of pension credits to eleven employees of the local IDA is a complicated issue dating back over a decade. Local economic development entities cropped up and have really functioned as government entities and the employees were hired as such. The actual payroll arrangements were through the Jefferson County Industrial Development Agency, and more recently have been defined as leased employees.
There are a couple of issues. One is what the Comptroller has ruled that these agencies are not eligible for participation in the State Retirement System. There is a body of legal opinion saying they are, as they have to comply will all the reporting and oversight rules of local governments. However, it's widely thought the Comptroller did not want a bunch of new entities in the system and has ruled accordingly. The ruling unfortunately collides with the lives of 11 people.
All that being said, the employees involved will likely take issue with the terms of their hiring and the clear representation that they are public employees. In short, you shouldn't need a $400 an hour lawyer when you take a job. That's going to be the difficult issue as employees explore their options relating to the agencies involved.
If sustained, there are lots of questions. What happens to employee contributions under Tier VI ? What happends to employer contributions over the years. ?
This is a tough one to unravel and there will likely be many lawyers in the hunt before its all done.
In the meantime, this is an issue that is unsettling to the agencies involved. Whether this arrangement was correct in the first place is an issue to be debated, but the people involved deserve better than the Comproller's protracted probe has given them.
One other resolution would be legislative, although its not clear that would be considered.
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