Greensburg police union files suit to block change in retirement plan provider

Greensburg’s police union has filed suit in Westmoreland County court seeking to block a change to a retirement savings plan it says would violate its contract with the city.

Fraternal Order of Police Lodge 56 argues in the civil action filed last week that Greensburg’s planned change of provider for a voluntary 457 tax-deferred savings plan for city employees was made unilaterally, without bargaining with the union.

The suit says that represents a violation of the union’s five-year contract with the city that began in January, an issue the union says constitutes an unfair labor practice and prompted it to file a grievance on Oct. 25.

The union is seeking a preliminary injunction to prevent the change in plan providers from proceeding by Dec. 23, which it argues would undermine the grievance process.

The FOP said it believes the grievance will proceed to arbitration and “will take months to arbitrate.”

City council voted on July 11 to switch the 457 plan provider from Nationwide to One America, one of four companies that submitted proposals.

City financial adviser Ed Gaskey told council in June that making the switch would bring “both service technology and customer service to the city into the 21st century.” He said Nationwide was charging the city about $7,600 in annual fees that most other companies don’t for such a plan.

The union suit charges that the city is “transferring 457 Plan funds to One America for the purpose of buying cheaper insurance, not for the benefit of the FOP members, which is contrary to its obligation under the Internal Revenue Code ...”

The union asserts that the One America plan “is not comparable to the existing Nationwide plan” and “will be detrimental financially to the FOP members.”

The suit also expresses concern about “numerous consumer complaints” against One America. A Better Business Bureau web page documents more than a dozen complaints since July 2020 regarding various services provided by One America Financial Partners.

Gaskey told council One America would “do a rate lock” on insurance it already provides for the city if the company was selected as the 457 plan provider.

Gaskey also indicated One America offers a better selection of investments than Nationwide has. He said One America, on average, would charge lower fund fees than Nationwide for several investments held by most of the roughly 70 city employees participating in the 457 plan.

The FOP said its members were notified about the proposed plan provider change in an Oct. 21 letter. The union indicates its members were given until Nov. 29 to make any changes to their investments under the Nationwide plan, followed by a blackout period that would freeze accounts until Dec. 23, when the new One America plan would be in effect.

“The speed of the transition to One America will irreparably harm the FOP members and FOP retirees because there is not enough time … to move their funds from the Nationwide account into another investment vehicle,” the suit states. “Nationwide needs two weeks to move funds, and there is less than two weeks before the 457 accounts are frozen in the blackout period.”

The union is represented by the law firm of Meyer, Darragh, Buckler, Bebenek & Eck in the suit.

City solicitor Zachary Kansler didn’t immediately respond to messages on Monday seeking comment.