LOS ANGELES (CN) – Los Angeles police challenged the city’s interpretation of a pension plan, claiming the police and fire officers who contribute to their pension plans are exempt from a freeze on medical insurance premium subsidies.
The Los Angeles Police Protective League sued the pension plan’s administrator, the Board of Fire and Police Pension Commissioners for the City of Los Angeles, and the City of Los Angeles, in Superior Court.
The officers seek a declaration that employees who choose to make a 2 percent contribution of their base salary are exempt from the freeze on the subsidy.
The maximum monthly subsidy for the health insurance premium was fixed at $735.38 per month, effective July 1, 2005, according to the complaint.
Under the Los Angeles Administrative Code, the board could authorize a change of “‘the lesser of a 7 percent increase or the actuarial assumed rate for medical inflation for pre-65 health benefits established by the board for the applicable fiscal year,'” the complaint states.
“On or about June 14, 2011, the Los Angeles City Council approved an ordinance amending the Los Angeles Administrative Code (‘LAAC’) to freeze the maximum monthly subsidy for employees who retire on or after July 15, 2011 at the then current level,” according to the complaint.
“In response to that ordinance, on or about June 24, 2011 LAPPL [The Los Angeles Police Protective League] and the city entered into a letter of agreement (‘LOA’) regarding the subsidy which allowed employees who opt to make a future two percent (2 percent) contribution of their base salary to the plan (affected employees) to be exempt from the freeze.”
But the officers and the city disagree on how the agreement should be interpreted. The plan administrator says it can “provide annual increases to the affected employees that are less than the maximum amount authorized,” according to the complaint.
“During the negotiations that produced the LOA, the parties expressly intended that, in return for the 2 percent salary contribution from affected employees to the plan, when those employees retired the amount of the entitled subsidy would be that which was in effect as of the date of the LOA plus an annual increase equal to the maximum amount authorized, with the board having no discretion to provide a lesser annual increase,” the complaint states.
“Nevertheless, as a result of a mutual mistake of the parties, or a mistake of LAPPL which the city at the time knew or suspected, the LOA … may not accurately and concisely express that intent.”
The officers want the court to revise the agreement to reflect the letter’s “true intent.”
“The mission of the Los Angeles Police Protective League is to vigilantly protect, promote, and improve the working conditions, legal rights, compensation and benefits of Los Angeles Police Officers,” according to the group’s website.
The League is represented by Stephen Silver with Silver, Hadden, Silver, Wexler & Levine of Santa Monica.
It seeks declaratory relief, reformation of the letter of agreement, and rescission.