Blue-collar workers sue over DROP changes

The union representing municipal blue-collar workers has sued its employer, saying City Council had no right to alter the DROP pension program.

AFSCME District Council 33 argued in a lawsuit filed Wednesday that pensions must be bargained.

The union is seeking an injunction from the Common Pleas Court to block changes to the Deferred Retirement Option Plan.

In addition, the union has been working without a contract since 2009, and state law requires the city to maintain the status quo of employment until a new contract is negotiated, said Samuel Spear, the attorney for D.C. 33.

"DROP is a real important thing for people in our bargaining unit because they're the lowest paid," he said. "For a lot of people, it's the only saving plan they have."

DROP allows city employees to pick a retirement date up to four years in the future, then accumulate pension payments in an interest-bearing account while still earning their salary. They collect a lump sum upon retirement.

While envisioned as "revenue-neutral," the program has cost the beleaguered pension fund millions. Council voted this year to change DROP in the hope of making it less expensive. The changes would delay eligibility for non-uniformed employees and lower the interest rate on DROP accounts.

DROP became a lightning rod after politicians began enrolling in the program and exploiting a loophole that allowed them to retire for a day, collect their money, and continue serving in office.

For blue-collar workers, "it's not like what you hear with some of these politicians, who are getting hundreds and hundreds of thousands of dollars," Spear said.

Mayor Nutter wanted the program ended, and vetoed the Council bill to change and preserve it. Council unanimously overrode the veto this month.

Ten sitting Council members could still join DROP or a new option they created called PLOP (Partial Lump-Sum Option Plan). PLOP enables employees to collect three years of payments in a lump sum, to be taken directly out of their pensions based on life expectancy.

New members arriving in January are banned by state law from DROP.

D.C. 33 wrote to the city on the day of the override vote and asked that modifications to DROP not apply to its members.

The city did not reply to the letter until a bargaining session last Friday. The city's chief negotiator told the union "that the city considered DROP to be a non-bargainable issue," the lawsuit says.

D.C. 33 also filed an unfair labor practice charge Wednesday with the state Labor Relations Board, arguing that the city illegally altered the status quo.

The municipal union for white-collar workers, District Council 47, also has been working without a contract since 2009.

Nutter's spokesman, Mark McDonald, said he could not comment on a pending lawsuit.