Tampa Ordered to Pay $1 Million in 13th Check Pension Case

The City of Tampa has been ordered to pay $1 million in costs in a class action lawsuit filed by a retired Tampa firefighter.

John Parker filed the suit claiming that in 2004 the city’s police and fire pension board failed to provide retirees with benefits under a special provision known as a “13^th Check Program.” According to Governing.com, the “13^th Check” benefit is described as follows:

A perk of some pension programs, the 13th check refers to an extra check retirees (and in some cases, employees) receive at the end of a fiscal year if a pension fund has performed better than expected. The practice is controversial because pension fund rates of return vary from year-to-year and actuaries rely on an average rate of return over multiple years to do their accounting of the fund’s liability.

After the suit was filed, the board agreed it made a mistake and entered into a settlement to pay retirees the required “13^th check” for 2004. The Circuit Court of the Thirteenth Judicial Circuit confirmed the settlement and “specifically determined that the Board’s failure to pay the 13th check benefit was a result of its erroneous interpretation of the pension contract and applicable law.” Because Florida statutes allow a prevailing party to be awarded the costs of bringing suits like this, the Circuit Court awarded Parker his costs, which were determined to be just over $1 million.

The pension board appealed the costs ruling to the Second District Court of Appeal claiming the prevailing party statutes were not applicable to suits aimed at enforcing “local laws”. The Second District agreed with Tampa and reversed the Circuit Court concluding that the “13^th check” benefit was created under a special act of the legislature addressing a local issue. Parker appealed to the Florida Supreme Court.

In a Per Curiam decision issued on October 23, 2014, the supreme court reinstated the trial court’s award of costs to Parker.

Although the pension plan at issue here is a local law plan created by special act of the Legislature, that plan exists within and is subject to the framework for local law plans established in chapters 175 and 185. The prevailing party attorney’s fees provisions of sections 175.061(5) and 185.05(5) are an integral part of that statutory framework.

Here is a copy of the ruling: Parker v Tampa