Pension Benefit Case Holds Baltimore City Liable to Retirees but Not Active Members

Daily Record article (2019-05-13) reported that a recent circuit court case held that  Baltimore City is liable for damages based on changes made to its police and firefighter pension system that eliminated a benefit. However, the damages only apply to retirees and retirement-eligible members and do not apply to other active members of the pension system.

The case is Robert F. Cherry Jr. et al. v. Mayor & City Council of Baltimore City and the opinion was written by Baltimore City Circuit Judge Julie Rubin. The article stated that the case originated in 2010 after the City eliminated a variable benefit granted by its Fire and Police Employees’ System. The benefit increased in good economic times but did not decrease during bad economic times. The City created a tiered cost-of-living adjustment to replace the variable benefit. The City’s act was challenged by local unions.

That article noted that Rubin had held in a prior opinion that the City breached its contract with retirees because it “retrospectively diminished” their benefits. In the current opinion, Rubin held that the City’s change did not cause a breach of contract for active members who are not retirement eligible.

From the article:

The local unions announced the decision Monday, saying in summary that the retirees “won” while the active members “lost” but adding that their attorneys were still reviewing the 150-page opinion issued by Baltimore City Circuit Judge Julie R. Rubin. …

Baltimore City Solicitor Andre M. Davis said that he was still reviewing the opinion Monday afternoon but that the city was pleased Rubin ruled in its favor on active employees, calling that part of the opinion “a very big win for the city.”

Davis had previously stated that the City would appeal Rubin’s earlier decision that found a breach of contract. The article also noted that a federal case challenging the system change based on constitutional grounds had been on hold but was recently reopened.

A copy of the decision is not currently available.

For more details about this important case, be sure to read the full Daily Record article.

 

 

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