Scranton Considering Court Action to Halt Pension Raises for Retirees

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Scranton’s pension systems could run out of money in less than 5 years. That looming insolvency is forcing the city to consider halting pension raises coming this year for retired police officers and firefighters.

From the Times-Tribune:

Arguing that the pension funds are not financially sound, Scranton continues to evaluate legal options to halt raises that are due retired police officers and firefighters, including possibly seeking an injunction, city solicitor Jason Shrive said Wednesday.

Mr. Shrive said no court action has been taken yet, but it remains a possibility if the fire and police pension boards go through with a plan to pay retirees half of the 1.75 percent salary increase that active police officers and firefighters will receive in January.

[…]

The raises go into effect today, but there is still time to challenge the payments because checks to retirees, who are paid semimonthly, won’t be issued until Jan. 15 and Jan. 28.

Mr. Shrive wrote to the police and fire pension boards in November, advising them that the city maintains that no raises can be paid to retirees based on a section of the city code that says increases in pensions “shall not be granted” unless the pension funds are actuarially sound. Mr. Shrive cited a report prepared in October by the plans’ actuary, who determined both plans are unsound.

[…]

“The city is still hopeful the various pension boards and the pension plan administrator will think better of the decision to pay the increases, in light of the plans’ funding,” he said. “If the boards and investment administrator still intend to make the increases … our legal options could be to seek injunctive relief against the issuance of those raises.”

Scranton’s police and fire pension funds have a combined deficit of $141 million.

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