STEVENS v. FOX
2016 OK 106
Okla.2016Background
- Plaintiffs (Stevens and Dooley), taxpayers and vested OPERS members, challenged HB 2630 (Retirement Freedom Act) seeking declaratory relief and to enjoin enforcement, arguing the Legislature violated the Oklahoma Pension Legislation Actuarial Analysis Act (OPLAAA).
- HB 2630 (2014) authorizes a new defined-contribution option for OPERS members hired on/after Nov. 1, 2015; employer matches employee contributions and must remit additional amounts to the closed defined-benefit plan to "reduce liabilities."
- OPLAAA requires the Legislative Actuary to certify whether a retirement bill is "fiscal" or "nonfiscal" (procedural steps and timing differ); plaintiffs contend the Actuary wrongly certified HB 2630 as nonfiscal.
- Plaintiffs asserted taxpayer standing (illegal expenditure of public funds) and individual standing (vested members concerned about actuarial soundness), and also raised separate claims under Okla. Const. art. 23, § 12 and IRC § 401(a)(2) about exclusive use of pension assets.
- Trial court granted summary judgment to defendants (OPERS Director and Board), finding (1) plaintiffs’ OPLAAA challenge was non-justiciable (legislative procedural matter), and (2) HB 2630 did not immediately increase DB plan costs or create a new "retirement system." Case appealed to Oklahoma Supreme Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether OPLAAA violation (Actuary misclassification) is justiciable | OPLAAA is substantive and enforceable; Actuary wrongly certified HB 2630 as nonfiscal, so bill was passed using wrong procedures and is void | OPLAAA is legislative procedural self-rule; Actuary has sole authority to classify; courts should not review legislature's internal procedures | Court: Challenges to OPLAAA certification are non-justiciable political/legislative questions; summary judgment for defendants affirmed |
| Whether HB 2630 created a new retirement system or immediately increased DB plan liabilities | HB 2630 creates a new system and increases costs, benefits, normal cost, or actuarial accrued liability, so should have been treated as fiscal | HB 2630 does not create a separate retirement system for a new class, and it does not immediately raise DB plan liabilities or costs; employers must continue funding DB plan | Court: HB 2630 did not immediately create a new system or increase DB liabilities/costs for OPLAAA purposes |
| Standing: taxpayer / individual standing to seek relief | Taxpayer standing because alleged illegal expenditure of public funds; individual standing as vested OPERS members concerned about actuarial soundness | Injuries are speculative; no present reduction of benefits or funding cuts; declaratory relief not ripe | Court: Plaintiffs may have individual standing, but the OPLAAA claim is non-justiciable; taxpayer claim based on OPLAAA fails; other taxpayer claim (exclusive use of funds) was not decided and remanded |
| Whether exclusive-use/IRC §401(a)(2) claim (use of DB assets for DC startup/admin costs) can be resolved on summary judgment | Plaintiffs: startup/admin costs were paid from DB assets and thus diverted funds in violation of state constitution and IRC | Defendants: disputed fact issues about whether costs were paid, amounts, and funding sources; trial court did not adjudicate | Court: Trial court did not rule on this factual claim; remanded for further proceedings |
Key Cases Cited
- Hughes Aircraft Co. v. Jacobson, 525 U.S. 432 (1999) (distinguishes defined-benefit and defined-contribution plans and allocation of funding risk)
- Dank v. Benson, 5 P.3d 1088 (Okla. 2000) (judicial nonintervention in legislature's internal rulemaking; separation-of-powers limits review)
- Board of Trustees of Judicial Form Retirement System v. Attorney General of the Commonwealth of Kentucky, 132 S.W.3d 770 (Ky. 2003) (statutory procedural requirements for retirement bills are generally nonjusticiable unless constitutional rights implicated)
- Taylor v. State & Educ. Employees Group Ins. Program, 897 P.2d 275 (Okla. 1995) (vested-plan member standing to challenge actions affecting actuarial soundness)
- Thomas v. Henry, 260 P.3d 1251 (Okla. 2011) (taxpayer standing to seek equitable relief when alleging illegal expenditure of public funds)