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A PERS retiree cannot sue the Public Employee Retirement Board (PERB) for additional money that PERB estimated would be part of the retirement account. Under Bell v. PERB, A140350 (Or Ct App, December 1, 2010), the “economic loss rule” prevents a retired public employee from suing PERB for negligent misrepresentation that caused her to retire too early

By statute, as of last year, a PERS retiree explicitly has no right to projected or anticipated benefits in excess of the properly calculated statutory benefits. In the 2009 session, the Legislature passed ORS 238.455(6), providing that “No [PERS] member shall have any right to any allowance or other benefit other than that provided for in [PERS statutes] based on the board's estimate under this section or based on any other estimate made by the board for any other purpose under [PERS statutes].”

Even though the statute seems relatively clear, in Bell, the Plaintiff argued that the statutory exclusion of a right to estimated benefits did not shield PERB from a negligence suit based on PERB’s admitted negligence in providing her with incorrect projected benefits. It was not a right to the estimate, the retiree argued, but a right to have PERB issue accurate estimates of projected benefits. The trial court allowed the issue to go to a jury, and the jury found for the retiree, awarding the entire amount of the $207,000 prayer.

On appeal, the Oregon Court of Appeals did not address the scope of the statute because it found that negligent misrepresentation suits are precluded by the “economic loss doctrine.” As noted by the court, “a tort claim for purely economic harm cannot succeed unless the plaintiff can point to a statute or a special relationship’ giving rise to a heightened duty of care, above and beyond the generic duty to avoid unreasonable risk of foreseeable harm.” A special relationship can only arise from an explicit intent to create a statutory obligation enforceable in tort, or as the Court of Appeals stated, where “the statute's authors intended not only to create a duty, but also intended that ‘the breach of any such duty would give rise to tort liability.’ Wild Rose Ranch Enterprises v. Benton County, 210 Or App 166, 171, 149 P3d 1281 (2006).”

The court then determined that the statutory creation of the PERS trust fund does “not demonstrate legislative intent to create individual fiduciary relationships between PERB and every individual public employee in PERS, let alone tort liability for inaccurate account estimates.” This is especially true when one considered that PERB had to administer the fund in a way to benefit all PERS members (which cannot be harmonized with overpayment to individual members), and in light of ORS 238.455(6), which explicitly denies any right to estimates.

For the same reason, there was no common law fiduciary relationship created by PERB’s oversight of the PERS fund, since the duty was to all members, not individual ones. Further, the duty is to oversee the fund, not to provide estimates. So in the end, PERS members simply get to keep their exorbitant pension benefits that we have to provide by statute, and not any rosier estimates that PERB folks might accidentally come up with.