EMPLOYMENT LAW
Daniel Clark
In Kennedy v. Anchorage Police & Fire Retirement System, 485 P.3d 1030 (Alaska 2021), the supreme court held that the Anchorage Municipal Codes require that court ordered damages or settlements be considered retroactive compensation in calculating retirement benefits; however, such retroactive compensation does not entitle retirees to accrue credited service for periods in which they actively withdrew retirement benefits. (Id. at 1038). Police officers Kennedy and Feliciano retired from the Anchorage Police Department in 2011 after submitting complaints of discrimination. (Id. at 1032). At this time, Kennedy and Feliciano began to withdraw retirement benefits. (Id.). In 2017 a jury found that this discrimination amounted to a constructive discharge, and awarded Kennedy and Feliciano lost past wages and benefits. (Id. at 1033). Kennedy and Feliciano subsequently sought a recalculation of their retirement benefits. (Id.). The Anchorage Police & First Retirement System (APFRS) calculates retirement benefits based on retirees’ final average compensation. (Id.). Kennedy and Feliciano argued that the lost wages and benefits awarded by the jury should be considered in evaluating their final average compensation. (Id. at 1037). The court first found that under the municipal codes, the APFRS is bound by the jury decision and must consider court ordered judgements or settlements when calculating final average compensation. (Id. at 1035–37). However, the court found that the lost wages awarded in the present case could not be considered in assessing Kennedy and Feliciano’s final average compensation. (Id. at 1038). The court reasoned that because Kennedy and Feliciano were already withdrawing retirement benefits during the period for which the lost wages were awarded, a recalculation of benefits would amount to Kennedy and Feliciano accruing credited service while also receiving retirement benefits. (Id.). The court found that this was not permitted under the Anchorage Municipal Codes. (Id.). Affirming the superior court, the supreme court held that while the municipal codes entitle retirees to a recalculation of benefits based on court orders or settlements, such retroactive compensation does not allow retirees to receive credited service while also receiving retirement benefits. (Id. at 1038).
