In a Lawsuit Filed last week the Los Angeles City Attorneys Association (LACAA) allege the City of Los Angeles, elected officials, and employees violated state and federal laws by adopting an ordinance which froze their vested retirement health care subsidy.
The lawsuit also names the Board of Administration of the Los Angeles City Employees
Retirement System as a Real Party In Interest in response the Los Angeles City Employees’ Retirement System has called a special meeting to discuss the lawsuit
LACAA argues the City of Los Angeles through it’s employees and agents deprived its members of their vested retirement benefits which were clearly laid out upon entering employment and relied upon by the employees.
LACAA Lays out its case
The city attorney association accuses the city of running a “coercive campaign ..to extract additional economic concessions from its civilian employees”. LACAA asserts that the methodology for providing increases to the health subsidy is an integral part of the contractually vested retirement health benefit itself, as evidenced by the enabling ordinance and all subsequent amendments thereto. LACAA members have a constitutionally protected right to the retirement benefits of the plan that existed at the commencement of their employment.
The complaint, filed in Los Angeles County Superior Court, further alleges that a vested benefit can not be legally frozen only against certain groups of employees who declined to accede to further, substantial concessions to their mous.
Paul Castro the LAcityworkers.com spokesperson said, ” We have continuously stated that we believed the retiree health care subsidy and the increases to said subsidy are a vested benefit and freezing future increases to the subsidy would illegally reduce the benefit making it worthless. Finally a union has stood up to the city and vigorously protected the rights of its membership, all members of the Los Angeles City Attorneys Association should be proud of the exceptional work the board members have done on their behalf. I feel personally vindicated in my assertions that the membership should have rejected these poorly written deals from the start and continue to maintain our Retiree Health Care Subsidy was Always a vested right which could not be stripped away”
News to Segal
In a letter dated April 28, 2011, Segal answered the question of whether the so-called additional benefit provided under the Ostensible Vesting Ordinance would result in any additional liability to the city. The answer was a resounding “No.” Segal indicated that it had always assumed that the City of Los Angeles would continually fund the increases to the maximum retiree health insurance subsidy and, accordingly, that assumption had always been used in the actuarial valuation to determine the cities costs in connection with providing the retiree health insurance subsidy.
Specifically, Segal stated: ”In preparing all the prior actuarial valuations for LACERS’ Retiree Health Plan, we have always proceeded under the presumption that the plan benefit would continue to be paid indefinitely for the current members. In particular, we have assumed that the future medical subsidy amount would continue to increase with future medical inflation assumptions …. As we previously stated, we have always assumed in preparing our cost analysis for the Retiree Health Plan that all the benefits would continue to be paid indefinitely and that future medical subsidy amounts would continue to increase with future medical inflation. Therefore, we do not believe that there would be any additional cost that has not been accounted for in the actuarial process if the benefits were determined to be vested.”
The lawsuit seeks;
- an order commanding the City of Los Angeles and its retirement system to establish the maximum retiree health subsidy for each of LACAA’s members and former members without regard to Ordinance Number 181746 or, in the alternative, staying enforcement of Ordinance Number 181746 against LACAA members and former members;
- an order declaring that Ordinance No.181746 unlawfully impairs the contractual obligations of the city to provide a fully funded and/or substantial retiree medical plan premium subsidy, which is a vested right of the Affected Employees
- an injunction prohibiting LA City from seeking enforcement of Ordinance Number 181746,
- Reasonable attorneys’ fees and costs as well as other relief the court may deem proper.
LACAA represents LA City Attorneys who handle a wide range of both criminal and civil cases throughout the City of Los Angeles serving a population of nearly 5 million people.