City, Unions Wait For Judge’s Ruling On Pension Challenge

At issue is the legality of a 5 percent increase in employee pension contributions, along with the potential for another increase – not to exceed 5 percent – should the city’s required contribution top 35 percent of its payroll.

City lawyer Robin Shahar, one of the authors of the pension reform, said she feels “100 percent confident” in the legality of the pension changes.

She said $48 million in paid out pension benefits is at risk should Goger side with city employees.

“This has been a very important part of the city’s reducing its deficit, being able to provide the robust pension benefits that are provided by the plan,” Shahar said.

Atlanta Professional Firefighters Union head Stephen Borders, who is also one of the complainants, said the city employees just want clarity on the pension overhaul.

“We’re just asking for the court’s legal opinion so we can understand the current and future implications of the pension,” he said.

Mayor Kasim Reed pushed for the overhaul to close a $1.5 billion unfunded pension liability, and it’s seen as one of his key first-term achievements. 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.

At the time, the unions were perceived as having gone along with the plan in order to avoid layoffs, a claim some union members now dispute.  

The changes to the pension plans went into effect in November 2011, but the suit wasn’t brought until late last year.

Earlier this week, Reed has said he won’t approve any salary increases or corrections that police and fire have been asking for until the lawsuit is closed.

Atlanta police union head Ken Allen said those are “separate issues.”

“What’s he’s doing is penalizing employees that may or may not be members of the union that are involved in [the dispute] with salary issues that they know are in need of correction,” Allen said.

City lawyer Shahar said upping the budget while the suit is pending would be irresponsible.

“When we have a lawsuit that that risks $48 million, in terms of being good fiscal stewards, we should not be baking budgetary increases into future budgets until this issue is resolved,” she said.

When Judge Goger will rule on the legal dispute remains unclear.