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Mon November 18, 2013
City Workers Sue Over Recent Pension Reforms
Members of Atlanta’s fire and police unions, along with other city employees, are suing Mayor Kasim Reed and the city council to undo a portion of recent pension reform, arguing a key part of the overhaul is unconstitutional.
At issue is a five percent increase in employee pension contributions and the potential for another increase – not to exceed five percent – should the city’s required contribution to the plan top 35 percent of its total payroll.
“When we hired on, we hired on understanding these were the terms of our retirement,” said Stephen Borders, president of the Atlanta Professional Firefighters Union and one of the complainants. “They changed them halfway through.”
“It’s really bigger than the 5 percent they’ve already added. They’ve shown they can change the terms midstream, and that’s really the scariest part for us.”
John Bell, lawyer for the city workers who’ve filed the class-action suit, called the contribution increase “unconstitutional,” and says in the case of those hired prior to the reforms, which were instated in November 2011, the city is obligated to operate under the old contribution plan.
“It is our position that it is a breach of the contractual agreement that is implied when people went to work under that pension plan,” Bell said.
Reed pushed for the overhaul in order to close a $1.5 billion unfunded pension liability, and it’s seen as one of his key accomplishments. As part of the agreement, many city employees were allowed to keep a retirement plan more costly to the city if they paid that extra 5 percent.
The unions were perceived as having gone along with the plan in order to avoid layoffs. Borders said that wasn’t the case.
“Maybe the union leadership at the time, maybe they actually agreed to this. Maybe they had arguments, but because we don’t have a contract, we don’t have collective bargaining,” Borders said. “It was whatever the city dictated to us. We don’t sit down with an arbitrator and actually negotiate anything, because that’s not how the city works.”
In a statement, the city says it hasn’t yet been served with the lawsuit – but says it’s confident the court will uphold the reforms.
“The City performed extensive research on every element of the current pension plan and worked collaboratively with employees and their unions prior to its June 2011 passage. The final legislation was endorsed at the time by all unions representing city of Atlanta employees. We remain confident that the Court will uphold the City’s current pension plan.”