The Lexington-Fayette Urban County Government is entitled to reduce cost-of-living adjustments in the pensions of retired police officers and firefighters, the U.S. 6th Circuit Court of Appeals ruled Monday.
In 2013, Lexington Mayor Jim Gray announced a breakthrough deal to address the $296 million unfunded liability in the city’s police and fire pension fund. One part of the deal — authorized later that year by the General Assembly — reduced annual cost-of-living adjustments when the fund has less than 85 percent of the money it’s expected to need to honor future obligations. The size of the reduction depends on the size of a retiree’s pension, with smaller cuts for retirees who get smaller pension checks.
Retired police officer Tommy Puckett and retired firefighter Roger Vance sued the city, arguing that the changes were an unconstitutional violation of the terms of their pension contracts. They appealed to the 6th Circuit in Cincinnati after losing in federal district court.
However, Puckett and Vance failed to provide evidence showing how they are legally entitled to keep the same pension benefits for the rest of their lives, Judge Eric L. Clay wrote for a three-judge panel.