Borough of Ellwood City v. Ellwood City Police Department Wage & Policy Unit

**Police Union Loses Pension Contribution Battle** This case involved a dispute between the Borough of Ellwood City and its police union over pension contributions. The police union had won an arbitration decision that would have reduced or eliminated required employee contributions to their pension fund because the fund had a surplus of money. The union argued that since there was extra money in the pension plan, workers shouldn't have to keep paying into it. However, the Pennsylvania Supreme Court overturned the arbitrator's decision in favor of the borough. The court ruled that the arbitrator went beyond his authority by ignoring state laws (Act 600 and Act 205) that require pension contributions to be based on professional actuarial studies, not simply whether there's currently extra money in the fund. These laws mandate that contribution amounts follow specific funding standards calculated by experts. **What this means for workers:** Even if your pension plan appears to have surplus funds, you may still be required to make contributions as determined by state law and actuarial requirements. Unions cannot necessarily negotiate away legally mandated pension contributions, even through arbitration. Workers should understand that pension funding rules are often set by state law rather than just collective bargaining agreements.