The story of Janet Cosper, the Cobb County widow who was denied access to her husband’s pension by the city of Marietta, is an emotional one, but there are some intriguing legal questions there as well.
Janet lost her husband, Hal Cosper, to a heart attack last year just months before his planned retirement. Hal had worked for more than two decades with the city of Marietta and was fully vested in the city pension, but Janet was refused access to his pension because of a city policy that denies surviving spouses pension benefits if a vested employee dies prior to retirement.
The Marietta City Council, led by Mayor Steve “Thunder” Tumlin, last month approved a proposed fix that would extend survivor benefits to employees’ spouses, including a retroactive fix for widows like Janet Cosper. But last week the Marietta Pension Board rejected the council recommendation by a vote of 6-2.
Councilman Philip Goldstein, one of two city council members assigned to the pension board, voted against providing this protection to the families of city employees. One reason, he told me, was the retroactive nature of the proposal would violate the Georgia Constitution’s ban on gratuities.
In short, the state constitution says you can’t give away money. Because the city policy is that employees have to survive to retirement to receive their pension, Goldstein reasons, changing that now for Janet Cosper would be a gratuity.
“It is giving a benefit that is not there,” he said.
Goldstein is an attorney, but so is Tumlin and he dismisses this argument out of hand.
Former Attorney General Mike Bowers said it is a sticky question without a ready answer.
“It would probably would take a good bit of legal work to get to the bottom of that,” he said.
Twenty years ago his office released an unofficial opinion that lives in the same general neighborhood. In that case, the Coastal Georgia Regional Development Center had asked if they could disburse “surplus” pension funds as deferred compensation to center employees. Bowers’ unofficial opinion at that time was that such a plan likely violated the gratuity clause because was “extra compensation for service already rendered.”
So perhaps the question would be whether Hal Cosper, in death, would be receiving extra compensation because of the city’s policy not to pay out pension benefits for employees who die prior to retirement.
Atlanta pension attorney Ilene Ward said she doesn’t know much about the state’s gratuity clause, but she’s a self-described “ERISA geek.” ERISA is shorthand for the federal law governing pension plans.
Ward said the federal government — specifically the IRS — views pensions as compensation and taxes them as such. “So, in general, what someone earns in benefits would not be considered a gift,” she said.
Changing a policy to make it retroactive is problematic, she said. But she also said there could be merit in the argument that the pension is “the fulfillment of the employee’s expectations when he/she worked,” she said.
In the end, whether Mayor Tumlin’s proposed fix would stand up against Goldstein’s gratuities argument is something that would likely have to be hashed out in court. But, as one source told me, judges like widows more than politicians.