Court Reinstates Key Baltimore Pension Provision

BALTIMORE (AP) -- A federal appeals court has reversed a lower-court's rejection of certain changes in the pension system for Baltimore's police and firefighters.

The appeals court said Wednesday that the city's decision in 2010 to replace a variable benefit tied to stock market gains with a staggered annual cost-of-living adjustment based on age did not violate the constitutional rights of plan members. The appeals panel also affirmed a district judge's ruling upholding other pension reforms as constitutional.

But the lower court must now determine whether the elimination of the variable benefit amounted to an unconstitutional taking of private property without compensation, an issue previously considered moot.

The appeals court also noted that pension plan members are not barred from pursuing a state law breach of contract claim, meaning further litigation is likely.