Retired Workers File Lawsuit, Want City to Pay Health Insurance Costs : Pension: The action involves more than 1,400 employees who retired before Oct. 6, 1980.

A group of more than 1,400 retired city employees has filed a class-action lawsuit against the city of San Diego in an effort to force the retirement board to pay for their health insurance.

The lawsuit was filed by employees who retired before Oct. 6, 1980, and includes former police officers and firefighters, attorney Tim Cohelan said Tuesday. The lawsuit was filed Monday in San Diego County Superior Court.

According to Cohelan and some retirees, the main point of contention is that the city pays the health insurance costs for employees who retired after Oct. 6, 1980, but not for those who retired before that date. Cohelan argued that employees who retired before that receive smaller pensions and are less able to afford the high cost of health insurance.

Bob Jauregui, a former assistant police chief and a plaintiff in the case, said the city can afford to pay for the retired workers’ health insurance without using tax revenues. Funds from the city’s $1-billion retirement fund would more than cover the cost, Jauregui said.

“This isn’t tax money we’re talking about. . . . We think it only fair that they make these benefits a little more equitable,” Jauregui said.

Retirement administrator Lawrence Grissom said the city’s pension fund, which is invested in the stock market, totaled $987 million when the market closed Monday. Grissom declined to comment on the lawsuit, but acknowledged that employees who retired before the 1980 cutoff date face special problems.

“I think it’s safe to say that everybody knows that the cost of health care is rising by leaps and bounds,” said Grissom. “Those who retired prior to Oct. 6, 1980, have lower benefits. Therefore, the higher health costs are a problem for these people.”

Cohelan called the cutoff date arbitrary and suggested that the City Council played a role in establishing it.

“The importance of the arbitrary date has been underscored by the rapid increase in private health insurance plans,” said Cohelan. “People who found themselves on one side or the other of that date are either very unfortunate or very lucky.”

However, Deputy City Atty. Jack Katz said the date was actually picked by another group of former employees who filed an earlier class-action lawsuit against the city.

“The previous lawsuit was settled sometime in 1985,” Katz said. “The cutoff date was established by the plaintiffs themselves and carried through to the settlement negotiations, to which all parties agreed. This was blessed by the court, and then we took it to the City Council, which bought off on it.”

As to the lawsuit filed Monday, Katz said the city was caught off guard because both sides were still negotiating to resolve the dispute. The city had not yet been served with a copy of the suit Tuesday afternoon.

“I’m quite surprised. I don’t know anything about it. It was my impression that this was something they were still pursuing in the negotiation process,” said Katz.

Katz said he did not remember how many retired employees were involved in the lawsuit settled in 1985. Because the lawsuit was litigated so long ago, Katz said he could not remember why the group settled on the Oct. 6, 1980, date.

The Los Angeles attorney who represented the earlier class of workers could not be reached for comment Tuesday.

The complicated settlement in the first lawsuit involved a special one-time payment made to employees when they retire. The payment, commonly known at City Hall as the 13th check, is given to a retiring worker and amounts to $30 or $45 for every year of service.

The formula for police officers and firefighters calls for $45 for every year of service, while most other workers get $30. The payment is made in November, after the employee retires.

“The 1985 settlement agreement was that those who retired after Oct. 6, 1980, would get certain things and included health coverage to be paid by the city. Those who retired prior to that date would not get retiree health coverage. This was something subjected to negotiations and put to a vote (of those who filed the lawsuit),” said Katz.

Nevertheless, Cohelan argued that the cutoff date is unfair to those who retired before the first lawsuit was filed almost a decade ago.

“None of these retirees (those represented in the lawsuit filed Monday) knew that this date would be established. Nobody knew that, if they retired before Oct. 6, 1980, they would be penalized in this fashion,” Cohelan said. “I’m sure they would have delayed their retirement if they knew there would be such a profound difference in their benefits.”