Commonwealth Court ruled the Mt. Lebanon police union's interpretation of COLA benefits violate Act 205, the Municipal Pension Plan Funding Standard and Recovery Act.
According to Judge Jubelirer, Mt. Lebanon's actuary, G. Herbert Loomis, testified that his cost estimate was based on a 15 percent COLA cap and that an analysis of a 90 percent COLA cap would have significantly increased the projected financial impact of the plan modification.
This ruling will save the municipality thousands of dollars a year.
Court disallows higher benefit for Mt. Lebanon police retirees
That's a tough one for me.
ReplyDeleteThese guys do a pretty good job and potentially put their lives at risk everyday.
The absurd school district administrators with their recent raises increased their pensions by probably as much as the officers were reduced.
Sorry guys.
Very tough call.
ReplyDeleteI wish I could write that the school district is saving thousands of dollars on pensions, but that will never happen. They just keep doling out other people's money.
ReplyDeleteElaine
There's something to think about the next time someone mentions throwing away millions on turf for third graders or we hear about poor suffering teachers just scraping by. These days, cops everywhere are potentially going into deadly situations every time they're called or even pulling over someone for speeding. While I disagree with working toward a pension, the least we could do is pay those guys more. Talk about exceeding expectations.
ReplyDeletePolice and fire departments, and the creation and maintenance of infrastructure, are the three basic services that are legitimate obligations of a local government. The people who provide these services should be properly compensated at public expense - although I support a defined contribution system over a defined benefit system for pensions.
ReplyDeleteAs much as many readers to this Blog may disagree, entertainment and recreation venues, their desirability notwithstanding, are not essential services to be provided by local government. If a market exists for a pool, golf course, field sports, etc., enterprising people will provide those services at a profit; which, I might add, benefits the local government more than if it were to provide those things itself. But that the local government does provide these things it should not do so at the expense of its basic services.
The test of recent field and recreation propsals is to ask whether any of them will result in diminishment of essential local services. If the answer is "yes," then they should not be funded with public money. If the answer is "no," we may still disagree about whether the public should fund such things but we would do so with the knowledge that, either way, our essential services will not suffer.
The pension plan document was poorly worded, ambiguous at best, by the municipality. The police had one interpretation, the employer another. Had the actuary not been able prove he based his funding requirements & benefits on the intended 15% max increase over whatever early retirements qualified for and amounted to rather than 90% of a full pension, Commonwealth Court might well have gone with the written pension document and the police. Interestingly, Court of Common Pleas had earlier sided with the police.
ReplyDeleteMt. Lebanon police are well compensated. They can retire in 25 years and receive annual pensions of 75% of their final pay with annual COLA's increasing that to a max of 90% (up to 15% over the 75%)over time in their defined benefit retirement plan.
"..recent field and recreation propsals.."
ReplyDeleteMake that, "..recent field and recreational proposals..."
This is a very complicated issue. The basic issue was the early retirees, several of whom had retired with only 8 to 12 years of service, thought by their interpretation of Marcia Taylor's wording that they qualified for a pension that would eventually reach a level of 90% of a pension amount based on 25 years of service salary. It may have taken 20 or more years in retirement for them to reach the 90% level, but that's what they demanded.
ReplyDeleteElaine
Public sector pensions in this country are another area where taxpayers lose. The winners are the attorneys, who negotiate the deals in the first place and then are called upon to handle any complaints or appeals, too.
ReplyDeleteKicking the can down the road looks good at first, but the bill always comes due.
I read recently that another municipality recently had to change its health care coverage for some retired cops after it was realized that the community was paying for them as if they were still employed. Unfortunately, thousands of taxpayer dollars were spent before this was uncovered and fixed.
Local civil servant pensions are financial time-bombs, waiting to explode. I would recommend all Blog readers (indeed, all Mt. Lebanon residents if it were possible!) watch a video (8'46")from the Reason Foundation entitled "Stockton, California Went Bankrupt. Is Your City Next?" Mt. Lebanon is in, apparently, good financial shape; but the Stockton situation is a cautionary wake-up call for all local governments, large or small.
ReplyDeleteNote to the District: Please show this video to your high school students this academic year. I think they might get some good out of it.
Why does this - "The pension plan document was poorly worded, ambiguous at best, by the municipality" - seem to be a recurring theme in both SD and muni affairs?
ReplyDeleteWe spent how much fighting for and defending against parking spaces. I'm sure we incurred legal fees defending against the police pensions.
The district legal beagle meter is probably whirring overtime on the teacher lawsuit.
With all the lawyers in residence you'd think lawsuits wouldn't be so prevalent.
How much were the legal fees?
ReplyDelete