In 2011, City Council adopted an ordinance (84-2011) that made extensive and profound changes to the Cincinnati Retirement System (CRS). The changes were in response to the declining ability of the CRS to sufficiently finance the City’s pension fund. The investment losses during the 2008 recession; the failure of the City to contribute an adequate amount to the pension fund; and the previous implementation of a 3% compound COLA were all cited as primary causes for the fund decline.
While the reasons(s) were not certain, it was the employees and retirees who suddenly faced reductions in retirement benefits. Almost everyone who was an active employee at that time suddenly faced significant reductions in benefits. They now needed to work longer and pay higher contributions for fewer benefits than they had been promised. In the worst cases, employees for whom retirement was in sight, abruptly had 10 or 11 more years to work before they were eligible for benefits. In addition to the plan changes, major structural changes were made to the CRS Board of Trustees and to the (then) Retirement Division. The Board of Trustees was reconfigured so that a majority of trustees were appointed by the Mayor, relegating the active and retired member trustees to the minority. The Retirement Division, an agency within the Finance Department, was transformed into a Department of the city with its director reporting directly to the City Manager. As these changes took place, there was little communication with, or involvement of, any stakeholders.
This was also the time when the City imposed a revised classification system for its municipal employees. Suddenly, members of the CRS were divided into groups or classes named A through G. The classes for both current and future retirees were based upon their hiring date, years of service, age, and other factors. Essentially, the Retirees Class (Classes A and B) were those who retired on or before July 1, 2011. The Active Employees Class were primarily those who were working for the City, had five years of participation in the Cincinnati Retirement System (CRS), and who qualified for retirement benefits as of July 1, 2011.
Retired employees took action to litigate the changes. Retirees contributed to a Benefit Defense Fund to pay for the associated legal expenses. Unfortunately, the State courts sided with the City in 2012 and the Ohio Supreme Court refused to hear an appeal in 2013.
A group of active employees filed suit in Federal court over the changes in an action called Sunyak v. the City of Cincinnati. Not long after, AFSCME filed a lawsuit against the City for not paying their required contributions in an action known as Harmon v. City of Cincinnati. The two lawsuits were combined in the Federal District Court under Judge Michael Barrett, who sought to settle the cases by mediation among the parties involved. Judge Barrett wisely recognized that any solution to the CRS pension problem would also impact current retirees, so he brought existing retirees into this process. CMERA President Tom Gamel and a team of seven others served as the Retiree Plaintiff Team.
The parties met for years to reconcile the dispute. Eventually, the parties reached an agreement. Named the Collaborative Settlement Agreement, or CSA, the document provided the foundation for our pension and benefits. It was approved by the Federal District Court on October 5, 2015. A companion Consent Decree was also implemented to legally bind the parties.
The CSA maintained the group classifications and assigned benefits to each. Thus, different provisions for retirement eligibility and benefits exist within the CSA. So, to understand one’s benefits you must know which class you are in. A common misunderstanding is that anyone who is retired is a member of the Retirees group. This sounds perfectly logical, but it doesn’t work that way. If you retired on or after July 1, 2011, you are — and always will be – a member of the Active employees group
These documents oversimplify the arduous work and countless hours of time spent by all parties in order to reach this agreement. Pensions, healthcare, COLA, and governance of the CRS are all addressed. The CSA represents a commendable action by a group of resolute employees and retirees. Their combined effort resulted in retirees having a reasonable degree of certainty that a pension and benefit package would be available for the near future.
CMERA was actively involved in representing the concerns of the Retiree group. Most who are CMERA members now are also members of this group. As time moves forward, however, more and more Active employees group members are coming into CMERA. As our organization moves forward, we wish to confirm that CMERA addresses the concerns of ALL retirees, regardless of one’s class classification. In fact, the long-term survival of CMERA depends on this.
The documents around the CSA and Consent Decree are available as PDF links on this page for viewing and/or downloading HERE.