Search the News Archive

Baltimore Might See Police Exodus Due to Pension Payment Terms

Excerpt: A generous Baltimore police pension plan is likely to create an unprecedented exodus of experienced officers over the next eight months and has city leaders scrambling to fill the ranks. Nearly a fifth of the Baltimore Police Department is eligible to retire under the provisions of a retirement plan with cash pay-outs so large it is becoming increasingly irresistible ...

Baltimore Court Ruling on Police, Firefighter Pensions Likely Faces Appeals from Unions and City Government

"Judge Julie R. Rubin ruled last year that the city breached the unions' contracts when it changed pension benefits for people who were already retired.... In Monday's ruling, she said those retirees are entitled to seek damages for the lost benefits. But she also ruled that the city could make modifications to the pension contract that extended the years of service from 20 to 25 years for employees to receive pension benefits."

EEOC Files Appeal in Baltimore County Pension Case

"The [EEOC] is appealing a court ruling that absolved Baltimore County of having to return money to thousands of employees who overpaid into the pension system.... EEOC lawyers have argued that the county knew for years that its age-based pension plan rates were discriminatory, and the possibility of having to pay employees back should have been 'foreseeable for several decades.' A federal judge ruled in 2012 that the county had been wrong to overcharge older workers. In August, another judge ruled the county would not have to pay those workers back."

Baltimore County Pension System Ruled Age-Discriminatory

"A federal judge has ruled that Baltimore County's pension system discriminates against beneficiaries because older workers were required to pay more toward their retirement than younger workers.... In a statement, EEOC regional attorney Debra Lawrence said the county provided no financial justification for the practice."

Baltimore County Considers Issuing Bonds to Raise Funds for Pension Contributions

"Baltimore County officials say they can close a gap in pension funding while saving taxpayers hundreds of millions of dollars. But their planned strategy is one that carries considerable risk, experts say. County Executive Kevin Kamenetz has proposed borrowing $255 million through pension obligation bonds and repaying the money over the next three decades."

Baltimore County Seeks to Borrow $255 Million to Fund Pension System

"Baltimore County Executive Kevin Kamenetz wants to borrow $255 million and repay it over the next 30 years to help fund the county's retirement system, a move that would carry risk but that the administration says could benefit taxpayers in the long run. [The county's] Administrative Officer ... told the County Council ... that the administration would introduce legislation next week to allow the county to issue pension obligation bonds. The bond issue would not have to be approved by voters. In July, the county lowered its projections on the assumed investment earnings for its retirement system, meaning taxpayers must contribute an additional $15 million annually to the retirement system starting next year."

Union Questions Baltimore County's Decision to Borrow $25 Million from Pension Fund for Recycling Facility

"Baltimore County plans to borrow $25 million from its pension system to upgrade recycling facilities, a move some County Council members and union leaders are questioning.... The county plans to borrow the money at an interest rate of 7.875 percent and repay it within 15 years. But the Fraternal Order of Police Lodge No. 4 questioned the legality of the move, union president Cole Weston said. ...'The employee pension system has an obligation and responsibility to the people in the plan,' said Weston, who served on the pension system's board for more than a decade until his June retirement. 'And pension systems are not to be used as banks.'"

Baltimore Mayor Takes Stand in Pension Trial

The Fraternal Order of Police and the firefighters union contend that the administration's plan, which delayed retirement for some and abolished a fluctuating cost-of-living increase, among other changes, violates their contracts with the city.

Unions Sue City of Baltimore, Allege 'Systematic Underfunding' of Pension System

Excerpt: The city police and fire unions filed a lawsuit today against the city in federal court, alleging the mayor and finance director have for years 'breached its contract with its police officers, firefighters and retirees by systematically underfunding' the retirement system.

Baltimore Police, Fire Unions Frustrated by Ruling Raising Retirement Age

"Leaders of the Baltimore police and fire unions say they are disappointed by a Court of Appeals ruling upholding changes to the city's pension plan ... The Court of Appeals ruling affirmed the lower court's computation of $31 million in damages to retirees who had already earned their pensions....The lawsuit came after the city, facing a staggering budget shortfall following the 2008 financial crises, changed its pension plan to require police and firefighters to serve 25 years instead of 20 to retire and get benefits." [Cherry v. Mayor and City Council of Baltimore City, No. 36 (Md. Aug. 16, 2021)]

SEC Announces Additional Investor Roundtable in Baltimore for Main Street Investors to 'Tell Us' About Their Investor Experience

"[An] additional investor roundtable to discuss the Commission's recently proposed rules regarding the obligations of financial professionals to investors will be held in Baltimore on the evening of Sept. 20, 2018.... Six roundtable discussions already have taken place in Houston, Atlanta, Miami, Washington, D.C., Philadelphia, and Denver. In these roundtables, Main Street investors have had the opportunity to speak directly with Chairman Clayton and senior staff about the SEC's efforts to enhance retail investor protection and promote choice and access to a variety of investment services and products."

Baltimore Fire and Police Pension Changes Ruled Unlawful

"Reforms implemented in 2010 ... increased employees' contributions and replaced a variable benefit tied to investment returns with a tiered cost-of-living increase. Instead of annual increases that averaged 3% under the variable benefit, the 2010 pension reforms created a tiered COLA that gave older retirees 2% increases, while retirees under 55 did not receive an increase. In the latest ruling, issued Jan. 2, [Baltimore Circuit Judge Julie Rubin] said the variable benefit change was a breach of contract." [Cherry v. Mayor and City Council of Baltimore City, No. 24-C-16-004670 (Cir. Ct. Balt. Jan. 2, 2018)]

Baltimore County Can't Challenge Ruling That Its Retirement Plan Contribution Requirements Mistreated Older Workers

"The U.S. Supreme Court announced that it won't hear a case asking whether Baltimore County, Md., violated federal law by requiring older workers to pay higher retirement contributions than younger workers who enrolled in the county retirement plan at the same time. In March, the U.S. Court of Appeals for the Fourth Circuit found that the county's practice of mandating higher contributions from older workers violated the Age Discrimination in Employment Act."

Text of Fourth Circuit Opinion Rejecting Baltimore Police and Firefighters' Federal Constitutional Challenge to Changes in Pension Benefits (PDF)

"[We] conclude that the members' rights under the Contract Clause were not impaired, because the members retained a state law remedy for breach of contract.... [U]nder Maryland law, the City is only permitted to make reasonable modifications to its pension plans and is required to provide members with a substantially similar program after such modifications." [Cherry et al. v. Mayor and City Council of Baltimore City, Nos. 13-1007, 13-1115 and 13-1116 (4th Cir. Aug. 6, 2014)]

Washington-Baltimore Area Benefits Survey: Part-Timers Getting More Perks

Excerpt: Employers in the Washington-Baltimore region offered part-time workers better perks this year, such as paid days off, in lieu of creating full-time positions, according to an annual survey of human resources officials to be released [today].

First Circuit Holds Sun Capital Private Equity Funds Not Liable for Withdrawal Liability of Portfolio Company

"Specifically, the First Circuit held that: [1] Under the partnership test in Luna v. Commissioner, the two funds did not create an implied partnership-in-fact that constituted a control group ... [2] Congress did not firmly indicate an intent to impose withdrawal liability in this situation.... [The decision focused] on the issue of common control. The First Circuit did not address any other issue, such as the trade or business issue." [Teets v. Great-West Life & Annuity Ins. Co., No. 18-1019 (10th Cir. Mar. 27, 2019; cert. denied Nov. 25, 2019)]

Applying Sun Capital: District Court Finds Private Equity Fund Liable for ERISA Withdrawal Liability

"This decision ... is arguably the first time a district court applied the 'investment plus' and 'partnership-in-fact' tests for determining potential withdrawal liability in the private equity context since the First Circuit issued its rulings in Sun Capital ... in 2013 and 2019." [Longroad Asset Management LLC v. Boilermaker-Blacksmith National Pension Trust, No. 23-0738 (W.D. Mo. Aug. 19, 2025)]

The Supreme Court Won't Review Sun Capital Partners -- What That Means for Private Equity

"Technically, the Sun Capital Partners appellate decisions are precedent only in the First Circuit ... Private equity funds may still argue that different standards should apply in other circuits. However, another court reviewing these same issues ... could follow the Sun Capital Partners analysis. It is also possible that the Supreme Court will decide to review the threshold 'trade or business' issue if there is a split among the circuits in subsequent decisions. But private equity funds can't count on that. What steps can private equity funds take to protect themselves?" [Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund, Nos. 16-1376, 19-1002 (1st Cir. Nov. 22, 2019; cert. pet. denied Oct. 5, 2020)]

Latest Sun Capital Decision Offers Little Relief to Private Equity Funds (PDF)

"The First Circuit's decision ... is of limited precedential value for private equity funds and their counsel. There remains a risk that, under different circumstances, a multi-fund ownership structure like the one used by Sun Capital (with no one investor owning more than 80%) might still constitute a partnership-in-fact. And, the First Circuit left untouched its prior controversial determination that the Sun Capital Funds were 'trades or businesses' under their 'investment plus' analysis." [Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund, Nos. 16-1376, 19-1002 (1st Cir. Nov. 22, 2019)]

Some Less Egregious Aggregation? First Circuit Reverses the District Court in Sun Capital Partners

"The First Circuit's reversal of the latest District Court opinion in Sun Capital Partners is a welcome decision that overturns the District Court's arguably overbroad application of the aggregation and liability rules as applied in the ERISA context. The most recent Sun Capital Partners decision also provides some potentially significant guidance on when funds within the same fund family might indeed effectively be aggregated notwithstanding that neither fund individually owns 80% or more of the underlying company. However, fund sponsors should keep in mind that the First Circuit's initial 'trade or business' decision remains in effect." [Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund, Nos. 16-1376, 19-1002 (1st Cir. Nov. 22, 2019)]