Recently several websites and individuals have been putting out information concerning the case entitled Fry v. City of Los Angeles. Fry is the case brought against the City of Los Angeles by the Los Angeles Retired Fire and Police Association (LARFPA) and four of its members. (The case has been identified as Fry by the courts because that is the last name of the first individual specifically named in the lawsuit.) The information presented here will serve to better and more accurately explain the current status of the case.
LARFPA brought suit against the City challenging two ordinances passed by the City Council in 2011 impacting the retiree non-Medicare health subsidy (retiree health subsidy) administered by the Los Angeles Fire and Police Pension System. On July 28, 2014, Los Angeles Superior Court Judge Joanne O’Donnell handed down a ruling on Fry.
Judge O’Donnell ruled that the ordinance implementing a freeze of the retiree health subsidy for members not agreeing to pay an additional two percent in pension contributions was an illegal impairment of a vested pension benefit under state law. In her ruling, O’Donnell stated that a writ would issue against the City on this issue. (A writ is an order requiring the losing party to take an action. In this case the order would be to overturn the freeze.)
The City tried to defend the freeze by pointing to the “opt-in window” the City offered during which time members in Tiers 1 through 5 could buy back an unfrozen retiree health subsidy by making an additional two-percent pension contribution. Judge O’Donnell ruled that the “opt-in” offer did not save the freeze because the opportunity to buy back a vested right did not offer members any new advantage to offset the impact of the freeze. However, the judge said that she would not order the City to pay back the 2% contributions already made. Instead, she referred that part of the case to a different court. The other court will decide whether the City has to refund the two percent contributions already collected from members who opted in.
Judge O’Donnell also stated in her ruling that the retiree health subsidy was indeed a vested pension benefit, as the LARFPA has publically stated from the beginning.
Finally, the judge refused to order the City to guarantee future increases in the retiree health subsidy. Instead she stated the discretion to provide future increases would remain with the Board of Fire and Police Pension Commissioners.
As of August 28, 2014, Judge O’Donnell has not issued the actual writ. The LARFPA, through its attorney, has asked Judge O’Donnell to issue a writ that does two things: (1) directs the Board of Fire and Police Pension Commissioners to set future retirement health subsidy levels without regard to the invalid freeze ordinance, and (2) stops the City from continuing to collect two percent salary contributions from members who opted in. The City and the Pension Department have filed papers stating that only the first item—setting future subsidy levels without regard to the freeze–should be included in any writ. Once a writ issues, the City can appeal it to a higher court.
Once a writ issues, the LARFPA will notify our members immediately.
The Los Angeles Retired Fire and Police Association is made up of dues paying retired members and active members with 20 or more years of service. The LARFPA is the only organization dedicated to protecting the pension rights and benefits of both active and retired members of the Los Angeles Fire and Police Pension System.
By Ken Buzzell, Director, Los Angeles Retired Fire and Police Association
