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Member, Beacon International Group, Ltd.
The Georgia Supreme Court on Monday upheld an earlier Fulton County Superior Court dismissal of a lawsuit challenging the constitutionality of higher employee contributions for participants in Atlanta's three pension funds.
A group of participants in the Atlanta General Employees' Pension Fund, Atlanta Firefighters' Pension Fund and Atlanta Police Officers' Pension Fund filed a lawsuit in November 2013 challenging the city's reform, which was effective Nov. 1, 2011.
Those reforms increased contributions to 13% from 8% for employees who had designated beneficiaries and 12% from 7% for those without designated beneficiaries.
A Fulton County Superior Court judge dismissed the lawsuit in November 2014. The group of participants appealed the dismissal to the Supreme Court the following month.
“Today's ruling allows one of the most comprehensive and effective examples of pension reform in the United States of America to move forward,” said Atlanta Mayor Kasim Reed in a statement. “Thanks to pension reform, 30 years from now, the city will have saved more than $500 million and a pension deficit that was once projected to be over $1.5 billion will be zero.”
The city's three pension funds had combined assets of $3.1 billion as of June 30, 2014, according to the city's most recent comprehensive annual financial report.
John C. Bell Jr., an attorney for the plaintiffs, said he expects to file a motion for reconsideration.
Rob Kozlowski writes for Pensions & Investments, a sister publication of Business Insurance.