Borders et al.v.City of Atlanta et al.
More than 6,000 current Atlanta employees participating in the City’s defined-benefit pension plans challenged a 2011 ordinance that increased required employee contributions. They alleged breach of contract and unconstitutional impairment of contract, seeking declaratory and injunctive relief. The superior court granted summary judgment to the City, its mayor, and City Council members. The Supreme Court of Georgia affirmed. The Court distinguished earned pension benefits from anticipated compensation and held that the ordinance did not alter benefit formulas, calculations, or the amounts payable at retirement. Increasing employee contributions therefore did not divest the plaintiffs of earned benefits or create the contractual impairment they claimed. The Court also relied on the distinction between pension benefits and pension obligations: employees had no contractual right to an unchangeable contribution rate. Because the increases were not retroactive and the plaintiffs offered no other meritorious basis for finding the legislation unreasonable, the judgment for the defendants stood.
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