UPDATES with comment from school district and plaintiff’s attorney.
A DeKalb County Superior Court judge has ruled a lawsuit against the DeKalb County School District, alleging the district violated retirement plan rules by ending it without enough notice, can proceed as a class action.
That means more than 10,000 current and former teachers who worked with the district in 2009 could eventually join the lawsuit and recoup what has been estimated at more than $250 million in lost retirement contributions.
In granting the class action status, Judge Gregory Adams' March 26 decision established two subclasses, for employees or their beneficiaries who were either at-will or on annual contracts, who were actively employed by the school district or the DeKalb County Board of Education on July 27, 2009, and did not receive retirement contributions to a supplemental retirement fund after July 31, 2009.
“What it means for all teachers ... is everybody should know when they’re working for a school district when people make promises to you about your retirement, those promises should be kept,” said John Salter of Barnes Law Group, which represents the plaintiffs. “You shouldn't promise someone something and then balance your budget on the backs of your educators. It’s cheating and swindling.”
A DeKalb County School District spokeswoman said officials are reviewing the ruling and deciding on next steps.
Adams had previously ruled in 2015 that the district had not breached its contract, saying there was no provision that stipulated the district could not reduce contributions without the two-year notice. In 2018, the Georgia Court of Appeals reversed that decision, citing a "governmental promise" that no changes would take place without a the notice.
The original lawsuit, filed in 2011 by Elaine Gold and school psychologist Amy Shaye, contended the school district breached an agreement that said district officials would give employees two years' notice before reducing contributions to the Georgia Tax Shelter Annuity Plan. Instead, the school district suspended contributions abruptly in 2009, citing a budget shortfall after a 3% state reduction in funding for all Georgia school systems.
Last fall, the Georgia Supreme Court upheld the appellate court ruling that the district had breached its agreement with teachers by ending the plan without enough notice.
The district had annually contributed 6% of a participating employee's salary. During the 2009-10 school year, DeKalb was scheduled to pay $26.5 million into the plan.
The annuity plan, established in 1979, was an additional benefit to educators and a Social Security alternative. The fund is separate from the state retirement fund and is paid into individual employee accounts, not taxed until withdrawn.
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