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PUBLIC EMPLOYEES GO TO COURT OVER PERS RAID

 PUBLIC EMPLOYEES GO TO COURT OVER PERS RAID
 SACRAMENTO, Calif., Feb. 19 /PRNewswire/ -- The Public Employee


and Retiree Coalition was in court today seeking to restore nearly $2 billion that the Governor took last year from the Public Employees Retirement System to balance the state budget.
 The suit, before California's Third District Court of Appeal, charges that a bill, AB 702, which was passed by the Legislature, and signed by the Governor in June 1991, violates the state constitution because the PERS fund is a trust fund for the "exclusive benefit of public employees and retirees."
 "The $1.9 billion came from interest on employees' contributions and was paid out as supplemental income to the oldest and poorest retirees," said Peggy Claypool, of the California State Employees Association, and the lead petitioner in the lawsuit. "What the Governor has done is violate a contract between the state and its employees."
 In addition to raiding the PERS fund of approximately $1.9 billion, AB 702 mandated that all new state employees be placed in an inferior or second tier retirement system. This would give new employees an average of $00 per month when they retire.
 The bill also gives the Governor the power to appoint the fund's actuary, which is the person who determines the contribution payments the state owes to the fund.
 "This means the Governor has political and arbitrary control over a fund that belongs to the employees," said Yolanda Solari, president of the California State Employees Association, which is a member of the coalition.
 "We feel confident that the courts will agree that the PERS money cannot be used as a bailout every time the state is in trouble," Solari said.
 Nineteen employee organizations, as well as 22 individuals are the plaintiffs in the case.
 Judges Robert K. Puglia, Coleman A. Glease and Rodney Davis heard the oral arguments today, and are expected to take up to three months to issue a ruling.
 Meanwhile, public employees aren't taking any chances. They are sponsoring an initiative that would permanently keep the Governor and Legislature from raiding the PERS fund. Californians for Pension Protection must gather a million signatures to qualify for the November ballot.
 -0- 2/19/92
 /CONTACT: Pat McConahay of California State Employees Association, 916-326-4379/ CO: Calif. State Employees Assoc., Public Employee Retiree Coalition ST: California IN: SU:


DG -- SF019 -- 0720 02/19/92 19:32 EST
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Date:Feb 19, 1992
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