City of San Diego wins suit over employee retirement benefits - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

City of San Diego wins suit over employee retirement benefits

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SAN DIEGO (CNS) - A panel of state appellate justices handed the city of San Diego a victory Friday in litigation over the timing of the elimination of certain pension benefits.

The City Attorney's Office had no immediate comment on the decision upholding a Superior Court ruling, penned by 4th District Court of Appeals Justice Gilbert Nares with concurrence by Justices Patricia Benke and Judith McConnell.

The case involved nearly 600 city employees hired between July 1, 2005, and Feb. 16, 2007, who were caught in limbo when San Diego eliminated four special benefits to workers.

According to court documents, city labor contracts with unions that took effect on the first date prohibited new hires from purchasing service credits that could be applied to their later retirement payouts. However, the City Council did not outlaw the practice in the municipal code until January 2007 -- with its action taking effect the next month.

The city filed suit when the San Diego City Employees Retirement System advised employees that the effective date that the benefits were abolished was February 16, 2007, not July 1, 2005, according to the documents.

The defendants, who included the affected workers, claimed the City Council could not apply the ordinance retroactively.

However, the appellate justices affirmed the lower court ruling that the City Council could rescind the benefits on the earlier date, because they weren't offered to the newer employees in their labor contracts, and thus were never vested.

Other benefits no longer offered to municipal employees after July 1, 2005, were the "13th check," in which workers could receive more money if there was a surplus in the retirement system, and the deferred retirement program, in which employees could receive some pension payments while still employed.

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