GA Supreme Court Upholds Pension Contribution Increases for Firefighters

The Supreme Court of Georgia handed Atlanta firefighters, along with other city workers, a loss in their bid to challenge significant increases to their pension contributions.

Police, firefighters and city workers filed a class action suit in 2013 seeking to block the city’s attempt to increase their pension contributions by at least 5%, and up to an additional 10% depending on how much the city has to increase its contributions. The workers claimed the city breached their employment agreements and violated the Georgia Constitution’s “Impairment Clause”.

The trial court disagreed, and upheld the city’s actions. The Georgia Supreme Court agreed with the trial court. From the ruling:

• On June 29, 2011, the City enacted Atlanta Ordinance 11-O-0672, which amended the [pension] Plans.
• Section 5 of the Ordinance… increased Plaintiffs’ prospective annual contributions to the Plans by an additional 5% of the member’s annual compensation.
• Section 9 of the Ordinance further provided that members’ contributions might be increased by an additional 5%, up to 17% or 18% of their annual compensation, if the City’s actual required contributions to the Plans exceed 35% of the City’s total payroll.
• The complaint, which was filed on November 14, 2013, alleged that Defendants breached Plaintiffs’ employment contracts and violated the impairment clause of the State Constitution (“Impairment Clause”), Ga. Const. of 1983, Art. I, Sec. I, Par. X,7 when Defendants passed the portions of the Ordinance which increased the amounts that the Plaintiffs were required to contribute to the Plans, even though Plaintiffs would receive the same amount of retirement benefits to which they were already entitled prior to passage of the Ordinance.
• In this case… the Ordinance …did not alter Plaintiffs’ pension benefits, but rather modified their pension obligations, and in no manner divested Plaintiffs of their earned pension benefits, so as to implicate constitutional concerns.
• Simply, in the present case, there was no breach of the employment contracts or the Impairment Clause in the manner urged by Plaintiffs, and therefore, such alleged breach and impairment fail to provide a basis upon which to find that the Ordinance is unreasonable.
• Furthermore, inasmuch as the increases in pension contributions pursuant to the Ordinance and Amendment were not retroactive and the Ordinance and Amendment do not alter benefit formulas, calculations of pension benefits, or the actual benefit amounts payable to the participants at the time of retirement, such circumstances likewise do not negatively impact the Ordinance. And, Plaintiffs have not provided any other meritorious legal basis upon which to find the Ordinance unreasonable.

Here is a copy of the ruling: s15a0816