Baltimore County workers who overpaid into pension won't get paid back

Judge rules that Baltimore Co. workers who overpaid into pension won't get paid back

A federal judge has ruled that the Baltimore County government will not have to pay millions of dollars to employees who overpaid into the county pension system for years.

Courts ruled in 2012 that the county's pension system was discriminatory because older workers were required to pay more than younger workers. But U.S. District Judge Richard D. Bennett ruled Wednesday that the county doesn't have to pay back the workers who overpaid.

Officials said the decision saves the county as much as $19 million in potential payments to the workers.

"We are greatly relieved to have it resolved at this point," said James Nolan, an assistant county attorney.

It's not clear how many workers would have been due payment if the ruling had gone the other way. The county said it would have taken years of research to figure out how much workers would have been owed.

The matter largely affected workers hired before 2007, when the county ended its decades-long practice of setting pension contribution rates based on age but only for new hires.

Allegations of discrimination in the pension system emerged in 1999 and 2000, when two correctional officers lodged complaints through the U.S. Equal Employment Opportunity Commission.

But the EEOC didn't sue on the workers' behalf until 2007, an "unreasonable delay" that the federal judge said was a factor in not awarding damages.

When the complaints were first made, the county denied wrongdoing and sent information supporting its argument to the EEOC — but heard nothing for years, and continued racking up a potential damages it might have had to pay to affected workers, Bennett noted.

"Baltimore County had reason to believe that its pension plan contribution scheme was entirely lawful prior to the determination of liability in the present case," he wrote.

The judge also noted that monetary damages haven't been awarded in similar pension cases, and that damages aren't required under the law that's central to this case: the federal Age Discrimination and Employment Act.

The pension system includes all county workers except Board of Education employees, who participate in a different system. There are about 9,500 active employees and 6,000 retirees in the system.

County workers weren't expecting to recover any money from the case, said Norman Anderson, president of AFSCME Local 921, which represents about 700 trades workers in several county departments. Most of the employees in his union who were hired before 2007 have since retired or moved on, he said.

Dave Rose, second vice president of FOP Lodge 4, which represents county police officers, said some officers were paying 2 percent more toward pensions than younger colleagues for years.

"That adds up to quite a bit of money," Rose said.

As part of settling the lawsuit, the county and its unions agreed in April on new pension contribution rates for all workers — including those hired before 2007 — eliminating age-based rates.

The case had bounced around the federal court system for years between rulings and appeals, and almost made a trip to the U.S. Supreme Court, but the high court refused to hear it in 2014. The judge's decision this week closes the case, unless the EEOC files an appeal. Officials with the EEOC declined to comment Friday.

The decision also spells the likely end to a companion lawsuit. The county had sued longtime pension adviser Buck Consultants in an attempt to make that company pay some or all of any damages related to the pension case. Officials said the county had relied on advice from Buck Consultants, now a subsidiary of Xerox, in making decisions about the pension system for 70 years. That lawsuit was on hold while the main lawsuit was decided.

The county has since dropped Buck Consultants and now receives advice from Bolton Partners.

Meanwhile, the county lost a decision in another long-running employee lawsuit this week. The Maryland Court of Appeals ruled against the county Thursday in a case over how much police retirees had to pay for their health insurance.

Courts previously ruled that the county had to pay back more than $1.6 million to retired police officers who were overcharged for their health insurance. The county fought the case for years and, at one point, the FOP asked a judge to hold County Executive Kevin Kamenetz in contempt of court for not paying the money.

The county eventually paid but continued to fight the ruling. The money has been held in an escrow account, and the union hopes it can be distributed soon, said the FOP's Rose.

The case started in 2007 and at least 10 FOP members who were due money have died, Rose said.

County officials declined to comment on the case Friday because its lawyers hadn't yet reviewed the ruling.

Writing for the Court of Appeals, Judge Robert N. McDonald said the county didn't make any compelling new arguments in its latest appeal.

In his opinion, McDonald quoted "a noted philosopher in another line of work" — late baseball great Yogi Berra — saying the latest review of the case was "like deja vu all over again."

pwood@baltsun.com

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