City of Chattanooga Pension Reform Ruled Constitutional

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Chattanooga, TN (WDEF) – The U.S. Court of Appeals for the Sixth Circuit affirmed a ruling dismissing a lawsuit filed against the City of Chattanooga by a group of retired firefighters and police officers.

It was two years ago the Chattanooga City Council passed multiple amendments to the city code provisions governing the Chattanooga Fire and Police Pension Fund.

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In early 2014, retired firefighters and police officers alleged the cost of living adjustment (COLA) amendment violated three provisions of the Constitution: the Contract Clause, Due Process Clause, and Takings Clause. In affirming the ruling, the panel of three judges ruled, “The retirees do not have a contractual right to a fixed three-percent COLA, because the City Code does not bind the Fund to the fixed COLA.”

Attorney Wade Hinton said, “The fire and police pension reform is one of the most significant achievements in City government over the last decade. Those reforms – especially the COLA amendment – placed the pension plan on solid financial footing without a tax increase and gave the City budgetary flexibility to address other matters, such as increasing pay to correct disparities in the fire and police departments.”