2016 June

Tennessee (Dyersburg) – Increased Retirement Age, Reduced COLAs, Plan Conversion, Changed Final Salary Calculation

Posted by StuartBuck in Changed Final Salary Calculation on June 13, 2016 with Comments Off on Tennessee (Dyersburg) – Increased Retirement Age, Reduced COLAs, Plan Conversion, Changed Final Salary Calculation

Type of reform:

In December 2015, Mayor John Holden and the board of alderman of the city of Dyersburg enacted several changes to the public retirement plan.  The changes we made in order to implement the reforms mandated by Tennessee’s Public Employee Defined Benefit Financial Security Act of 2014. The board of alderman unanimously approved the changes and stated that the intent was to improve the financial stability of the retirement plan and its members.

The changes to the plan include:

  • A transition of nonvested members and new entrants to a 401(k)-style defined contribution plan.
  • Elimination of the annual cost-of-living-adjustment (COLA), which was formerly 2 percent, for all retirees under the age of 70, and a reduction in the COLA to 1 percent for all retirees between the age of 70 and 74. Retirees over the age of 75 will continue to receive a 2 percent COLA.
  • Change in the eligibility for and calculation of lump sum benefits.
  • Increase in the years of service required to be eligible for unreduced benefits.

Case: 

Aaron Cryer, Brian Peckenpaugh, Jason Alexander v. Mayor John Holden, Board of Alderman of Dyersburg, et. al, No. _______ (Circuit Court for the 29th District of Tennessee, Circuit Judge Russell Lee Moore, Jr.) (June 2016).

Status of litigation: 

The plaintiffs, supported by the unions Dyersburg Fire Fighters Association, IAFF Local 2269, and the Southern States Police Benevolent Association, brought a class action lawsuit, asserting that the new reforms unlawfully deprive retirees of vested benefits and interfere with the right of city employees to retire early with full benefits. They request a full repeal of the reforms, punitive damages, and attorney fees.

In October 2016, Judge Moore denied the plaintiffs’ assertion of a class action.

On October 2, 2017, Judge Lee Moore held a hearing in the case. Both sides argued their positions, and Judge Moore stated he would issue a memorandum opinion.

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