Mastagni Holstedt, APC filed an amicus brief with the California Second Appellate District, Division One. At issue are adjustable retirement health subsidies under the City of Los Angeles’ retirement system. In 2006, the City of Los Angeles passed an ordinance which allowed the Board of the Los Angeles Fire and Police Pension System to provide an adjustable retirement health subsidy. This adjustable rate would allow the City to increase contributions as costs increased over time.
However, in 2011, the
City of Los Angeles passed an ordinance freezing future increases to the
subsidy. Los Angeles employee organizations brought suit alleging this violated
their vested right to a variable subsidy. The trial court agreed and ordered
the City to increase the subsidy pursuant to the 2006 ordinance.
The City appealed the
decision arguing it had plenary authority to modify the pension subsidy as it
was a type of “employee compensation.” In its brief, Mastagni Holstedt, APC
argues a pension subsidy is not salary, but is instead a vested benefit. The California
courts have already held on numerous occasions a pension benefit, once vested,
cannot be revoked. The California Constitution’s Contracts Clause prohibits such
an action. Thus, the City cannot arbitrarily revoke a benefit by reforming it
as “employee compensation.”
Mastagni Holstedt, APC
thanks the employee organizations who joined the firm in fighting back against
the destruction of employee benefits. Mastagni Holstedt attorneys David E. Mastagni, Isaac S. Stevens, and Ian B. Sangster represent the amici in the matter.