White v. Public Employees Retirement Board

When a trustee has a fiduciary duty, his or her actions will be reviewed based on the reasonableness of his or her decision-making, rather than purely weighing the costs versus the benefits.

White and other plaintiffs alleged that actions by the Public Employees Retirement Board (PERB) violated the Board's fiduciary duties, specifically when it settled the case City of Eugene v. State of Oregon. The lower court entered judgment in favor of PERB. The plaintiffs – all members or retirees of Public Employees Retirement System (PERS) – allege that PERB’s decision to settle was made without evaluating and weighing the cost of the appeal and the potentially “enormous” benefit to PERS. Additionally, PERB’s decision to reallocate 1999 earnings, reflecting a lesser percentage, was also a breach of fiduciary duties. The Supreme Court reviewed the reasonableness of PERB’s judgment to settle, and determined that the Board's actions were in line with its fiduciary duties, but the transfer of the earnings must be reviewed on remand to determine if it was consistent with those duties. Affirmed in part and reversed in part, remanded.