Ruling on city pension faulted

Raise for retirees will cost current workers, mayor says

December 23, 2007|By Nicole Fuller | Nicole Fuller,sun reporter

A ruling by the state's highest court requiring the city of Annapolis to increase retiree pensions to coincide with pay scale increases for its active employees could impact future pay raises for city workers and force higher individual contributions to the pension fund, city officials said.

The ruling handed down recently by the Maryland Court of Appeals was the result of a long-running lawsuit filed by a group of more than 60 retired firefighters and police officers seeking increases in their pensions in tandem with increases in the city's current pay scale.

"It's a boondoggle for those that are retired at the expense of those that are active-duty people," said Annapolis Mayor Ellen O. Moyer.

"You can always require a bigger contribution from those now working into the pension fund, or put a lid on any salary enhancements," she said. "Either way, it's money out of the pocket of those on active duty."

City officials said they could not estimate the cost to the city.

The case has been remanded to Anne Arundel County Circuit Court for declaratory judgment.

The 62 former city workers retired in the 1980s, and first filed suit in 2002, arguing that they were entitled to merit increases awarded to city workers.

An Anne Arundel County circuit judge sided with the retirees, but failed to offer a declaratory judgment.

The city appealed to the Court of Special Appeals, which reversed the lower- court judgment.

In the Dec. 14 decision, the Court of Appeals, the state's highest court, said the civil service board's failure to consider the retirees' claims was "unreasonable action."

Lawyers for the workers cited the city code "cost-of-living adjustments," which reads, "Each retired member's pension shall be increased by the same percentage as any increase in the pay scale for members of the same rank and years of service who are on active duty."

Alderman Samuel L. Shropshire said he is considering putting together legislation that would remove the word, "any" from the code, although it is unclear whether that would affect the court's ruling.

"It's a technicality that could be removed," Shropshire said.

"Apparently, the court used that one word in making that ruling and we want to make sure our laws governing the city and pay are in such a condition that there is no loophole and the courts can't come in and make rulings like this again," Shropshire said.

The mayor added, "We don't know what the end result will be, but these are the challenges for us, to keep the pension system alive and well ... and to keep our salary scale competitive."

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