Baltimore police, fire unions want pension-cuts law thrown out

Unions call new law unconstitutional, want court-appointed monitor

September 20, 2010|By Andrea F. Siegel, The Baltimore Sun

Baltimore police and fire unions are asking a federal judge to throw out a law that made cuts to their pension system and to force the city to pump money into their retirement fund.

The unions had vowed to ratchet up their pressure on city officials after they overhauled the unions' retirement system in June, despite the groups' opposition and alternative suggestions.

The latest move was made Monday in a 67-page complaint that amends the lawsuit the unions filed shortly before city officials altered the retirement plan. In addition to the possibility of a long legal fight, the new complaint raises the threat that the revised pension plan and the city's savings from it could be erased by a judge. The unions claim the law that took effect July 1 is unconstitutional.

Bob Cherry, president of the police union, said the organizations were prepared to compromise to save the pension plan. They recommended less drastic pension changes to the City Council in the spring, but those were not adopted, he said.

"You can settle on the courthouse steps. We want to sit down and continue talking," said Bob Sledgeski, president of the firefighters union.

The unions contend that the city knowingly underfunded the plan for about a decade while overstating its worth, leading to a shortfall that was compounded by the recession. Now, they argue, city officials want union members and their survivors to sacrifice about $1 billion of what was promised in their contracts.

City officials declined to comment on the lawsuit.

The amended complaint comes about three weeks after Council President Bernard C. "Jack" Young said he wanted to revisit the pension system changes.

"He is open to working with the police and fire unions to come up with a fiscally sound plan that is sustainable," said Young's spokesman, Lester Davis.

City officials have said that with the new retirement plan, they saved $65 million and averted a financial crisis. Facing a $121 million overall budget shortfall, officials said they could not pay more than $101 million for a pension contribution, although the city's required obligations would have been about $166 million, if no changes had been made in the way benefits are calculated.

The amended lawsuit claims changes in the plan unconstitutionally violate union contracts. The changes include a raise in the minimum retirement eligibility from 20 to 25 years of employment for employees who've worked fewer than 15 years and revising the way cost-of-living raises are calculated.

Mayor Stephanie Rawlings-Blake's office said the changes in the plan were needed to sustain the fund.

"This year's reform of the Fire and Police Pension System was reasonable and necessary to ensure that retirees will have a dignified and secure retirement the City can afford.  The restructuring saves nearly $400 million over the next five years and rescues the pension system from fiscal collapse," Ryan O'Doherty, spokesman for Mayor Stephanie Rawlings-Blake, said in an e-mail.

Monday's complaint also asks that a judge order an accounting of the plan, force the city to pay the full amount it says was recommended by the plan's actuary from 2002 to 2010, appoint a monitor for the plan until it is fully funded at fair market value and bar the new pension law from taking effect.

andrea.siegel@baltsun.com

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