A past legal settlement involving the city of San Diego, its employees and their retirement system could prove to be a substantial barrier in City Attorney Mike Aguirre’s attempt to void employee pension benefit boosts dating back to 1996.

Aguirre and union attorneys met in court Friday to argue over the employees’ motion to have the case ruled in their favor by the judge before it hits trial.

The court was unable to finish oral arguments Friday afternoon, and will resume the hearing on Thursday when Council President Scott Peters’ motion to disqualify Aguirre from the case will be debated.

On Thursday, the presiding judge tentatively ruled that the Aguirre cannot challenge the benefit increases that were granted in a 2000 legal settlement, known as the Corbett settlement. If Superior Court Judge Jeffrey Barton affirms that tentative opinion, a significant amount of the $500 million Aguirre is attacking could be carved out from the legal challenge and protected.

Attorneys disagree over the true impact of the potential ruling. Aguirre has said the ruling would only protect that benefit boost given in the 2000 settlement and leave an estimated $450 million worth of benefits to be challenged. Others say the ruling would leave all benefits granted before the settlement protected, leaving only an estimated $40 million in benefits on the table. Read here for more on that.

During the hearing Friday, Barton challenged Aguirre to explain why 2000 settlement didn’t wipe away the benefit boosts given as part of a contested deal in 1996.

The city attorney said the Corbett settlement did not affect the benefits enacted in the 1996 deal – such as the purchase of service credits, a higher disability payment and the retroactivation of benefit increases to service that employees already performed.

Corbett only added a 10-percent increment to the 1996 benefit levels, Aguirre said, so allowing the settlement to stand would only protect the boost that was granted in 2000 and not the other enhancements made in 1996.

Attorneys for employees didn’t address the matter. They had argued that the Corbett benefit levels were binding, meaning only the 2002 deal was at stake in the litigation.

Arguments will resume at 1:30 p.m. on Thursday. The judge will issue his final ruling sometime after the hearing.


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