Opinion ID: 1203735
Heading Depth: 3
Heading Rank: 2

Heading: Trust Violations

Text: The Respondent Trustees did not draw down the appropriated funds, that is, the money earned for the trust by State employees, according to the statute. They did not question the Legislature's action when the pension trust fund's appropriation was expired contrary to statute even though they had been earned for the trust through services rendered. Cf. In re State Employees' Pension Plan, 364 A.2d 1228 (Del.Sup.1976). Finally, they actually cooperated with the Legislature's invasion of the EAF by receiving and then transferring to the general fund the employers' contributions earned by employees paid from special revenue funds, apparently including federal grant moneys specifically allocated for pension matching. All of these acts are violations of the Respondent Trustees fiduciary duties to the PERS and its participants. It is clear from reading the PERS statute that the Board of Trustees have broad powers in administering and managing the various pension trust funds. W.Va.Code §§ 5-10-5 to -13. The PERS Board, as trustee of retirement funds ... must dispose of them according to the law. The board has a fiduciary duty to protect the fund and the interests of all beneficiaries thereof, and it must exercise due care, diligence, and skill in administering the trust. 67 C.J.S. Offiicers and Public Employees § 244 (1978); see Mount v. Trustees of the Public Employees' Retirement System of New Jersey, 133 N.J.Super. 72, 335 A.2d 559 (1975). In the instant matters regarding funding of PERS, the Respondent Trustees, at best, have acted with gross negligence in failing to draw down earned and appropriated funds or protest lack of adequate appropriations as earned. At worst, the Respondent Trustees have acted in complicity to divert the employers' contributions earned by employees from special revenue funds into the general fund. Given these multiple breaches of fiduciary duties by the Respondent Trustees, they must take calculated steps necessary to recover these funds for the PERS.