Philly firefighters are suing their union over advice they say cost them pension benefits

Two Philadelphia firefighters are bringing a class-action lawsuit against their union and the city, alleging that union officials gave them bad advice on cashing in their vacation benefits, holding them back from maximizing their pension benefits.

Joseph Farrell, a captain, and Patrick Viola, a firefighter, filed the lawsuit on Oct. 27 against Philadelphia Firefighters’ and Paramedics’ Union, International Association of Firefighters Local 22.

They allege that Local 22 officials consistently discouraged members from “selling back” vacation time to the city — exchanging unused days off for monetary payment — and concealed from members that they could maximize their retirement income by doing so during their last two years before retirement or enrollment in the city’s Deferred Retirement Option Plan (DROP).

The suit alleges that union leaders told members that if they all sold back vacation time it “could end that benefit for firefighters and paramedics” because it would cost the city too much money.

“However, at the same time, certain union officials and high-ranking city fire department employees were doing the very thing they were telling rank-and-file union members not to do, and were selling back their unused vacation time to the city, thereby increasing their own pensions upon retirement,” the lawsuit alleges.

The plaintiffs are represented by the Fairness Center, a nonprofit law firm that describes itself as providing “free legal services to those hurt by public-sector union officials.”

“Rather than representing all firefighters fairly, union officials appear to have favored themselves and their friends over rank-and-file firefighters,” Fairness Center president and general counsel Nathan McGrath said.

Local 22 president Mike Bresnan declined to comment on the lawsuit. Ava Schwemler, a spokesperson for the city’s law department, also declined to comment.

The firefighters want to bring their claims on behalf of what they contend is at least 100 other union members who have either retired or enrolled in DROP since November 2019 and did not sell back the maximum amount of vacation time during the two years before their retirement or DROP enrollment.

Those two years are key because income earned during those years determines the amount of an employee’s pension, the suit explained. The maximum amount of unused vacation time an employee can sell back in one year is 192 hours.

If they sold back a total of 384 hours over those final two years pre-DROP or preretirement, members “could have potentially increased their pension payments by as much as hundreds of dollars per month,” the suit says.

DROP allows city employees to select a retirement date four years in the future and begin collecting pension payments in an interest-bearing account while continuing to work until retirement. Once they retire, they get a lump-sum payout.

The program was originally presented as a way to help efficiency in government by giving managers advance notice of an employee’s exit. But it’s also been criticized for allowing workers to collect pension and paychecks at the same time.

From its inception in 1999 through 2015, DROP cost taxpayers between $237 million and $277 million, according to a study by the Pennsylvania Intergovernmental Cooperation Authority, a state-appointed board that oversees Philadelphia’s finances.

The amount employees receive monthly through DROP is determined by their income in the two years prior to enrolling.

Viola, for example, enrolled in DROP in November 2020, the suit said. He learned later that he could have maximized his pension benefits by selling back his unused vacation time in 2019 and 2020.

“It’s bad enough that I will have a smaller pension because of union officials’ deception,” Viola said. “But it’s infuriating that if my wife survives me, she will have less to live on.”