Georgia High Court Sides With Atlanta on Pension Reforms

The Georgia Supreme Court on Monday upheld a series of pension reforms that increased contributions for Atlanta employees.

In a class-action suit, city employees had argued that the increased contribution rate amounted to a benefit cut – but the high court disagreed.

Details from the Atlanta Business Chronicle:

In a class-action lawsuit filed by Atlanta police officers, firefighters and other city employees, Presiding Justice Harris Hines declared three pension reform ordinances “did not alter plaintiffs’ pension benefits, but rather modified their pension obligations, and in no manner divested plaintiffs of their earned pension benefits.”

Lawyers for the workers argued before the court last May that pension reforms pushed through the council by Mayor Kasim Reed illegally increased city employees’ contributions toward retirement.

The ordinances required the workers to contribute 12 percent of their annual salaries toward their pension plan, up from 7 percent. The move was based on recommendations from a committee of business leaders, elected officials and union representatives Reed appointed to look for ways to keep the financially struggling pension plans afloat.

Monday’s 23-page opinion upheld a lower-court ruling, declaring that “where the legislation establishing a pension plan itself provides that the plan may be subject to modification or amendment, the participant does not acquire a vested contractual right in an unchanged plan.”

Photo by Joe Gratz via Flickr CC License