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Duluth ruling on retiree health care will save city millions

A judge’s ruling that Duluth can modify health care benefits for retirees will save $1 million the first year and $60 million to $100 million over the next 30 years, Duluth Mayor Don Ness said.

The Duluth News Tribune notes that two city retirees and a retiree’s spouse had sued last year when the city proposed changing its retiree health care benefits. They had been getting free health care and asked the court to bar the city from reducing health-care benefits for city retirees and their dependents.

But, the paper said, District Judge Kenneth Sandvik ruled Tuesday that the city may modify the retirees’ benefits whenever and however benefits for active employees are modified, because the collective bargaining agreements in effect on the retirees’ retirement dates don’t prohibit the city from doing so.

“The plaintiffs’ health benefits are not fixed and governed by the plan in place on the dates of their retirements,” Sandvik wrote. “As former employees of the city, the retirees were aware, at the time of their respective retirement dates, that the city often modified the health-care benefits of active employees.’’

Said the paper:

Paula Savela, one of the plaintiffs, said she was very disappointed in the decision. “We’re going to appeal it,’’ she said. “As far as I know, that’s the plan.’’

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