A Maryland federal judge ruled Tuesday that some Baltimore public employees' pensions were harmed by the city's elimination last year of payments tied to market returns.
U.S. District Court Judge Marvin J. Garbis decided that police and firefighters who were either receiving benefits or eligible to retire were "substantially impaired" by the city's decision to eliminate a gain-sharing mechanism for retirees. Garbis also allowed the plaintiffs who are already receiving pension benefits to proceed as a class.
Although Garbis has concluded that pensioners were harmed by the change, he may still find that the changes were "reasonable and necessary to serve an important public purpose."
Baltimore police and fire unions filed the lawsuit against the city about a year ago, after Mayor Stephanie Rawlings-Blake overhauled their pension system. The new system, passed by the City Council in June 2010, raised the minimum service time before retirement from 20 years to 25 and increased worker contributions, among other changes.
The mayor's office estimated the pension restructuring would save the city $400 million over five years. Council members decided it was necessary to cut future contributions to the fire and police pension funds by hundreds of millions of dollars in order to avert a budget crisis.