The West Metro Fire District is being sued by a retired firefighter and the wife of another district retiree over allegations that money from a retiree health trust fund was improperly used. The …
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The West Metro Fire District is being sued by a retired firefighter and the wife of another district retiree over allegations that money from a retiree health trust fund was improperly used.
The lawsuit, filed in Jefferson County courts, names the fire district, and the Executive Committee of IAFF Local 1309, a union for current employees of West Metro Fire District, as defendants.
The union and fire district gave current firefighters funds from the health trust as it was being closed down — something they say was appropriate, but the plaintiffs say was in direct violation of the trust rules.
The plaintiffs are listed as Tim O’Hayre and Ruth Brienza. O’Hayre spent 20 years working as a firefighter for the West Metro Fire District — a full service fire department that serves over 250,000 residents in Jefferson County and Douglas County. He was forced to retire due to a partial disability authorized by the Fire & Police Pension Association of Colorado, according to O’Hayre.
Brienza, a 62-year-old woman married to a former West Metro firefighter, is on the lawsuit instead of her husband, because she was eligible to receive funds from the health trust. Her husband is past the age to be able to qualify for benefits from the health trust.
O’Hayre and Brienza believe that they and other retirees and dependents from West Metro Fire were entitled to money that remained in the health trust. But the fire district gave money in the health trust to current employees’ retirement health savings accounts, or 457 retirement plans. West Metro says it took an appropriate approach to distributing the remaining funds in the health trust.
O’Hayre’s and Brienza’s attorney asked the judge to expand the lawsuit to include all eligible retirees and their eligible dependents who would have had health care coverage under the health trust through 2017. The number of eligible retirees is believed to be around 73 people — some of whom were in the courthouse for the case hearing on Nov. 8.
“We’re a bunch of old-school, beat-up, disabled firefighters. (West Metro) could’ve prevented a lot of these issues if they had just talked to the retirees,” said O’Hayre.
The health trust was created by West Metro Fire District in 1996 to provide health benefits to both active employees, and qualified retirees until they turned 65 and could apply for Medicare, according to court documents.
Part of that health trust included a separate account to hold funds just for retiree health benefits as well as their beneficiaries, known as the Retiree Health Account. Both current and retired employees contributed to the health trust before the fire district and the trustees of the trust agreed to start closing it down, beginning in March of 2015. The trust was to be officially closed on Dec. 31, 2017.
The health trust was closed down because, according to West Metro spokesperson Ronda Scholting, it was projected to fall behind by $15 million in funding. She said the district could have used reserves to keep the health trust running, “but that would have left the district in a stanglehold, with little or no operating budget.”
As the health trust was being terminated, the fire district agreed to provide retired firefighters with health-care benefits between 2015 up until the end of 2017. Both the firefighters and the district agreed to appointed the Executive Committee of IAFF Local 1309 to manage the health trust during the shut-down period.
According to court documents, about $1.7 million remained in the health trust as of Dec. 31, 2015.
In the joint resolution to end the health trust, signed March 10, 2015, a paragraph reads “any assets remaining in the health trust fund, after satisfaction of all liabilities, shall not revert to either the employees or the employer, but shall instead be transferred to such other entity or entities that will utilize them for similar purposes as the health trust.”
According to West Metro Fire’s agreement for coverage of retirees, funds contributed to the Retiree Health Account were meant to be used to provide benefits to eligible participants and their beneficiaries.
“The assets of the Retiree Health Account shall never inure, or revert to the benefit of the District or become part of the general assets of the fund,” the agreement reads.
Some of the funding from the Retiree Health Account did go to active West Metro employees in 2016 however — either placed in a retirement health savings account, or a 457 retirement plan for each eligible employee.
O’Hayre and Brienza are seeking an accounting and restitution for all money that was in the health trust as of March 10, 2015 and any money that was added later.
“We shouldn’t have to be sitting here talking about this. They should’ve never taken our money and did what they did with it,” Brienza said.
When asked for comment, the West Metro Fire District provided the following statement: “West Metro felt that those active employees who had been paying in the Retiree Health Account were entitled to a portion of those funds since they would no longer be receiving the health benefit they had been paying for.”
The statement also said the decision to reimburse current employees, made in conjunction with IAFF Local 1309, fit the mission of the Retiree Health Account.
The IAFF Local 1309 did not respond to multiple requests for comment about the lawsuit.
West Metro Fire District and IAFF asked the lawsuit judge for a summary judgment in their favor, with the hopes of avoiding a trial.
The judge in the case has not yet ruled on either the certification of class or the summary judgment requests. The trial is scheduled for Feb. 5, 2019 in a Jefferson County District Court.
“West Metro is defending this suit and firmly believes it took appropriate action in winding down the health trust in a fair and equitable manner,” the district’s statement concludes.
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