Fire And Police Retirees Not Entitled To Increased Pensions When Active Employees Reclassified

In 1993 and 2001, the City of Annapolis, Maryland hired consultants to analyze the City’s compensation plan. The 1993 study resulted in the City reclassifying police officers and firefighters by moving them to higher pay grades. In 2001, the City again assigned police officers and firefighters to new pay grades, and at the same time compressed the number of pay grades from 40 to 20 and the increments between steps in each grade increased from 5% to 5.36%.

A group of retired firefighters and police officers sued the City, alleging that they were entitled to adjustments in their pensions as a result of the City’s reclassification of active employees. The Maryland Court of Appeals disagreed, and rejected the lawsuit.

The dispute centered around a provision in the Annapolis City Code that provides: “Each retired member’s pension shall be increased by the same percentage as any increase in the pay scale for members of the same rank and years of service who are on active duty.”

The Maryland Court of Appeals rejected the retirees’ lawsuit. The Court held that “although the phrase ‘increase in the pay scale’ could have been more precisely defined by the City Code, its lexical ambiguity is dispelled once it is viewed in its codal context. It appears in a section of the code unambiguously captioned, ‘Cost-of-living adjustment,’ and therefore presumably applies only to such adjustments in the pay scale.”

City of Annapolis v. Bowen, 920 A.2d 54 (Md.App. 2007).

This article appears in the June 2007 issue