In a decision that apparently will cost Kenner’s government hundreds of thousands of dollars, if not more, Louisiana’s highest court this week ordered the city to factor in incentive pay, holiday pay and similar compensation when calculating pension contributions for firefighters.
The Supreme Court’s decision upheld a ruling last year by a state 5th Circuit Court of Appeal panel. That ruling reversed a Jefferson Parish judge’s decision to dismiss a class-action lawsuit filed in 2010 by a group of firefighters who said they were owed more in pension contributions than Kenner was paying them.
The seeds for the dispute were planted in 1999, when Kenner merged its municipal firefighters retirement system with the statewide system.
Before then, Kenner based its pension contributions for its firefighters on their basic salary plus supplemental payments the state mandates for full-time employees. After the switch, Kenner didn’t modify the way it calculated the contributions.
A group of firefighters sued in 2010, arguing that the new system required the city, in setting pension contribution amounts, also to take into account incentive pay earned by accumulating seniority, pursuing continuing education, working holidays and temporarily filling in for higher-ranking colleagues while they were on leave.
Then-Kenner Mayor Mike Yenni’s administration soon began paying pension contributions that accounted for holiday and fill-in, or acting, pay. But it refused to make that change retroactive or to consider educational or seniority incentives, according to court records. City officials estimated it would cost the city about $832,000 to make pension contributions going back to 2007 that took holiday and acting pay into consideration.
Kenner’s government asked that the firefighters’ suit be dismissed, arguing that the four types of compensation in question were not earned during regular shifts — that they were either bonuses or irregular, nonrecurring payments and so should not count when setting pension contributions.
Judge Ross LaDart, of the 24th Judicial District Court, who has since retired, sided with Kenner in December 2013. But, with one judge dissenting in part, a 5th Circuit Court of Appeal panel found that the payments were legally neither irregular nor nonrecurring. It therefore reversed LaDart’s decision.
The Supreme Court on Wednesday said forcing the city to consider educational, seniority, holiday and acting pay presented “no genuine issues of material fact,” and it affirmed the appellate panel’s ruling. Justice Jefferson Hughes dissented in part, saying neither educational nor seniority incentive pay should matter when it comes to pension contributions.
The firefighters’ attorney, Louis Robein, praised the high court’s ruling, saying it was “extremely meticulous in analyzing the facts and very strong in its application of pension laws affecting all public employees.”
It is unclear exactly how much the decision will cost the city. How much each of the 90 or so plaintiffs will get in adjusted pension contributions depends on numerous variables, said Kenner’s attorney in the case, Alvin Bordelon.
Nonetheless, Robein said the $832,000 figure cited by the city earlier in the case was “a good baseline.”