Maryland's highest court ruled Wednesday that an actuarial firm is on the hook for about $73 million after making mistakes in valuations for three state retirement programs over more than two decades.
The Court of Appeals supported the Board of Contract Appeals' decision that Seattle-based Milliman, Inc., which worked for the state retirement system from 1982 until 2006, is liable for errors in pension calculations for the State Police Retirement System, Law Enforcement Officers' Pension System and Judges' Retirement System.
"Milliman breached its contracts with the System … over a period of twenty-two years, thereby causing the System to inadequately plan for the costs of retirement benefits to surviving spouses of judges and police officers," the court's decision said. Three of the court's ten judges disagreed with the majority's opinion.
The firm was contracted to provide annual estimations of the amount of contributions that would be required for the Maryland State Retirement and Pension System to pay for future liabilities.