Greensburg appeals injunction sought by police union to block retirement plan switch
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Greensburg has appealed a preliminary injunction the city’s police union was awarded to block the city’s transfer of an employee retirement savings plan to a new provider.
The case also remains active in Westmoreland County Court, where Judge Harry F. Smail Jr. is slated Tuesday to hear arguments from the opposing parties on how the appeal process could affect Smail’s Jan. 3 injunction order.
In seeking the injunction, Fraternal Order of Police Lodge 56 argued the city’s decision to change the provider of the voluntary 457 tax-deferred savings plan for employees — including police — from Nationwide to One America was done without bargaining with the union. The FOP lodge says that’s a violation of its contract with the city.
The union has filed a grievance and says it sought the injunction to maintain the status quo with investments through Nationwide until the grievance is resolved.
Attorney Brian Gabriel, who is representing Greensburg, said the city wants to “expedite the handling of the appeal. It would be more efficient to do that and get a final decision from the Commonwealth Court.”
The union, in its lawsuit, also argued the One America plan “is not comparable to the existing Nationwide plan” and “will be detrimental financially to the FOP members.” It said the city’s initial schedule for transferring the plan to One America by this past Dec. 23 didn’t provide enough time for union members to consider moving their money into other investments.
In an opinion supporting his injunction order, Smail concluded the 457 plan is a fringe benefit under the collective bargaining agreement between the city and the police union.
“A shift in provider runs the risk of irreparable damage to plaintiff members’ investment accounts, in addition to potentially being a violation of the (collective bargaining agreement),” he wrote.
“The injunction merely stays any transfer of the 457 plan administrator pending the outcome of the grievance arbitration,” Smail added.
In its appeal of that decision, the city argued the “transfer to One America does not violate any provision in the collective bargaining agreement, which does not permit an arbitrator to add to or modify its provisions.”
It said there is no proof of “immediate and irreparable harm” to the union employees because the city’s financial adviser “demonstrated that the transfer to One America would benefit plan participants through lower fees and improved customer service.”
The city also said the injunction deprives it of its “managerial and statutory right to act as fiduciary for the benefit of plan participants.”
In an amended complaint filed in the county court, the union has asked that the injunction be made permanent, demanding that the court “permanently enjoin the city from appointing One America as the manager of the 457 plan.”
The union claims the city used “an unreasonable and imprudent process to select a different 457 plan manager that was not based on an objective analysis of relevant standards and criteria for a financial provider.”
The union asserted that, when the city’s financial adviser, Ed Gaskey of Gaskey and Associates, solicited proposals for a new 457 plan, he suggested only plans he sold or offered through his firm and that “this process was a behind-the-scenes arrangement outside of the view of the public.”
The FOP lodge said Gaskey’s firm sold the One America plan to the city and that he was appointed administrator of the plan.
When contacted by the Tribune-Review, Gaskey offered no comment and noted he is not a party to the lawsuit.
The city noted it does not have to respond to the amended complaint until its appeal of the case is adjudicated in Commonwealth Court.
Gabriel said the city wasn’t obligated to seek formal bids for a new plan provider. He said Gaskey presented information about plan proposals at a public council meeting, and the One America plan was approved at a subsequent council session.