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Baltimore court ruling on police, firefighter pensions likely faces appeals from unions and city government

A Baltimore circuit judge has ruled that retired police officers and firefighters are entitled to damages resulting from a nearly decade-long contract dispute with the city.

But the court also ruled in favor of the city in requiring employees to work more years to receive pension benefits.

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Judge Julie R. Rubin ruled last year that the city breached the unions’ contracts when it changed pension benefits for people who were already retired. She said retirees and retirement-eligible police officers and firefighters should be able to receive a “variable benefit,” an annual increase tied to the stock market.

In Monday’s ruling, she said those retirees are entitled to seek damages for the lost benefits. But she also ruled that the city could make modifications to the pension contract that extended the years of service from 20 to 25 years for employees to receive pension benefits.

City officials could not answer Monday how much the ruling could cost the city, but said it will spare a wave of retirements that city officials have been bracing for at a time when the police department is trying to increase the number of officers.

“The judge upheld the [service] increase from 20 to 25” years and found what the city did was “entirely appropriate,” City Solicitor Andre Davis said. Davis said he did not know what the ruling would cost the city but said it would likely appeal.

Councilman Eric Costello, who chairs the council’s budget committee, said the city has previously estimated and set aside approximately $67 million in case the city lost the lawsuit, but he could not say Monday what the latest opinion would cost.

City Council President Brandon Scott said he had not been briefed on the lawsuit but expected a briefing later in the week.

Sgt. Mike Mancuso, president of the Fraternal Order of Police Lodge 3, addressed the ruling in a brief statement Monday, saying, “The Retirees won.” But Mancuso said current employees lost because the length of service for retirement remains 25 years, and indicated the unions might appeal that ruling.

The changes to the pension benefits were passed in 2010 under then Mayor Stephanie Rawlings-Blake at a time when many municipalities made changes to pensions following the recession. At the time the pension legislation was passed, city officials said the changes cut about $400 million in long-term pension costs by reducing benefits, raising the retirement age and requiring higher contributions from workers.

The police and fire unions sued and the case has “taken an unusual and long path” through the federal and appellate courts, Rubin’s opinion said.

Richard “Dickie” Altieri II, president of the Baltimore Firefighters, IAFF Local 734, said Monday he would like to see the latest opinion appealed because he said the city broke its contract with existing members by requiring them to work longer to receive their benefits.

“When our members came in years ago, you got a pension of 20 years. Now the city comes and says you gotta stay 25 years,” he said. His union represents about 1,200 active firefighters and 800 retired members, he said.

Altieri said he believed the move will make it more difficult to attract top talent to the fire and police department if there is uncertainty in the contract moving forward.

The standard across the country had been 20 years, given the demands of a job that is often physically and emotionally challenging, Altieri said.

“It’s a very demanding job. You see a lot of things normal people don’t see,” he said. Many firefighters suffer from cancers tied to their work and some face PTSD. While cities have negotiated with unions to extend the amount of service, Altieri said in Baltimore, “the city just did it” and did not try to negotiate with the unions.

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According to the opinion, the city breached its contract “by unlawfully withdrawing or removing previously earned and accrued benefit entitlements, specifically the Variable Benefit.”

But regarding the length of service required of active employees, “the court finds that the prospective modifications to Plan benefits were balanced by a combination of essential and overwhelming public welfare considerations, and new benefits or qualifying conditions. The Ordinance was ‘a reasonable change promoting a paramount interest of the State without serious detriment to the employee,’” the ruling said.

Baltimore Sun reporter Ian Duncan contributed to this article.

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