Former employees sue City of Chattanooga over pension fund - | Chattanooga News, Weather & Sports

Former employees sue City of Chattanooga over pension fund

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CHATTANOOGA, TN (WRCB) - Some former Chattanooga police and firefighters are suing the City of Chattanooga over its recent pension changes.

The lawsuit claims the city is breaking federal and state laws by changing the cost of living adjustments, or COLA. The Chattanooga City Council unanimously approved the new Fire and Police Pension plan in March but the move sparked heated debate, especially from those already retired. And now some of those retirees are suing their former employer.

Two retired police officers and two retired firefighters filed the suit as a class action, saying the pension benefits for all police and fire retirees are at risk. The eight page lawsuit seeks an injunction that would essentially block the city from enacting the new pension plan.

The problem, the plaintiffs claim, is with the 3 percent COLA they get each year. The new pension would, among other things, cut that COLA in half while saving the city some $200 million over the next 26 years. Those suing said the cut in COLA violates their "contractual rights."

The lawsuit reads, in part, "Representations were made to them at the time of the enactment by the City of Chattanooga of the 2000 Plan, that their future cost of living adjustments would be guaranteed, and one or more of the plaintiffs actually made the decision to retire, when they did, based upon these representations and promises."

Councilman Moses Freeman told Channel 3 after Tuesday's City Council meeting that he doesn't see the lawsuit going anywhere. "I think we're at the best possible plan for reforming the pension. I think it's a good pension plan and I think they will learn to love the plan that we have developed," he said.

Mayor Andy Berke was unavailable for an interview Wednesday morning but his office told Channel 3: "The Pension Task Force worked to determine a consensus solution that would put our pension on a sustainable and healthy plan moving forward. We have over 1,500 active and retired public safety employees and we have seen tremendous support from the overwhelming majority of them. A lawsuit by four individuals does not change that fact."

The City Attorney's office will review the complaint and respond as required.

The new pension plan is scheduled to take effect July 1.

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