Unions sue over pension changes

The Boston Police Superior Officers Federation, Professional Fire Fighters of Massachusetts, and Boston Firefighters Union Local 718 - on behalf of public employees statewide - assert in a suit filed in US District Court that a provision in the new law amounts to breach of contract. The law, they argue, unfairly reduces retiree benefits by limiting what kinds of compensation count toward their pension.

Under the new rules, public employees can no longer use additional pay - such as educational stipends, uniform allowances, and the value of unused vacation and personal days - in their pension calculation. Most public employees, lawyers for the unions say, use such extras to raise their base pay substantially, which in turn boosts their retirement checks.

A second suit, filed in Suffolk Superior Court by the Superior Officers Federation and the Professional Fire Fighters of Massachusetts, challenges a new calculation of benefits for police officers and firefighters who are injured on the job, contending that the new law discriminates against disabled workers by treating them differently than other workers.

With the new pension law, disability benefits will be based on workers’ salaries for the year prior to when they became disabled, not the year prior to their retirement. It can take months, even years, for retirement boards to approve disability pension requests. In the meantime, employees out on injury leave are entitled to pay raises and cost-of-living increases. In the past, those pay increases would boost a worker’s disability pension by thousands of dollars a year, union lawyers said.

Together, the two lawsuits represent a direct challenge to efforts at cracking down on pension abuse and excesses by some public employees, which have been highlighted by a series of stories in the Globe. If the suits are successful, public workers could see their old benefit levels restored and taxpayers could be forced to pay damages.

The overhaul of state pension laws Governor Deval Patrick and legislative leaders agreed on last month seeks to close loopholes and crack down on abusers. The changes were designed to cut taxpayer costs and restore public confidence in government.

The Globe reported this week that public safety employees were rushing to retire before the new rules - especially those concerning disability pensions - took effect.

Lawyers for the unions say their members are the unintended victims of a pension overhaul - that in their zeal to clean up the system, Patrick and the Legislature have penalized employees who have done nothing wrong. Lawmakers wrote the new definition of compensation to prevent college presidents and legislators from boosting their pensions by including housing and travel allowances in the calculation. The change in the disability rule was aimed at Boston firefighters who have increased their pensions significantly by claiming injuries while filling in for superiors.

“These people have been paying into the retirement system for years, based on the rules of the game,’’ said one of lawyers who filed the suits, Harold Lichten of the firm Lichten & LissRiordan. “Now they’re being told their pension is going to be calculated differently. These changes could reduce their pension substantially.’’

One of the plaintiffs, Medford Fire Lieutenant Richard Conti, injured both knees while responding to a medical call in June 2008. He was carrying a 70-year-old man out of a cluttered apartment when he tripped over boxes and other debris, landing on his knees, and has been out on injury leave awaiting approval of his disability pension.

Though he received a 4 percent pay raise with the rest of his department in July 2008, under the new state law that increase would not count toward his pension. Conti figures he will lose between $1,500 and $2,000 a year.

“Being a firefighter is serving the public with your life and limb,’’ he said. “The mark of any civilized society is how well it takes care of those who serve them, when they become injured or are killed. We don’t get anything unreasonable considering the work we do.’’

Patrick spokesman Kyle Sullivan said the governor’s office had not yet seen the complaints, but he defended the legislation.

“The pension reform proposal signed by the governor closes loopholes and other opportunities for abuse that have angered the public for decades,’’ he said in an e-mail statement. “These suits are indications that the law has teeth and the short- and long-term savings to both the Commonwealth and cities and town will be significant. We are very confident that this critical reform will withstand legal scrutiny.’’

State Senator Steven Panagiotakos, chairman of the Senate Ways and Means Committee, said he believes the concerns raised by the unions can be resolved without litigation.

Lawmakers, he said, did not intend for such compensation as education stipends to be excluded from pension calculations, only housing and travel allowances and annuities. Panagiotakos also said legislators did not mean to change the way disability benefits are calculated for most injured police officers or firefighters, only to crack down on the practice in Boston of allowing firefighters to enhance their pensions by claiming injuries while filling in for a superior.

“There has been concern among some members that this was not what was understood,’’ he said. “This was more of an unintended consequence. We are looking at that issue to see if there can be corrective action.’’

In the suit filed on behalf of injured police officers and firefighters, lawyers argue that the new law illegally discriminates against disabled firefighters and police officers by using a different definition of compensation than for other retiring workers. The law, according to the complaint, is “essentially penalizing them for the years they have not been able to work.’’

In the case that covers all state workers, lawyers argue that the new definition of compensation constitutes a breach of contract, because thousands of employees joined public retirement plans expecting that the benefit formula would not be changed “to their detriment’’ so long as they remained in the plan and made required contributions. The plaintiffs argue that for years they have paid into retirement systems at levels based on their total compensation, which have included the extras.

The unions want the courts to bar implementation of the changes. They are also seeking unspecified damages and lawyers’ fees.

Andrea Estes can be reached at estes@globe.com.