Archive for September, 2011

Counties losing fight to conceal pension amounts

September 19, 2011

SANTA ROSA — The Sonoma County retirement board voted last week to release retiree names and their pension amounts, becoming the latest loser in seven separate superior court decisions since 2009 upheld by three different appeals courts.

When asked by a pension reform group, the three big state public pension systems — CalPERS, CalSTRS and UC Retirement — all released the names and pension amounts of retirees receiving $100,000 or more, needing no prodding from the courts.

But as pensions eat up more of state and local government budgets, a number of the 20 independent county retirement systems that operate under a 1937 act have refused to reveal how pension funds are being spent.

In addition to the pension reform group, several newspapers, a taxpayer association and a nonprofit freedom-of-speech group also have sued to force county systems to reveal pension records. They have an unbroken string of victories.

Superior courts have ordered disclosures by retirement systems in Contra Costa, Stanislaus, Orange, Ventura, San Diego, Sacramento and Sonoma counties, upheld by appeals court decisions in San Diego, Sacramento and Sonoma.

Much of the court battle has been over a provision in the 1937 act that says “individual records of members” shall not be disclosed. Part of the rebuttal is that the system’s list of members and pension amounts is not “individual” like a health record.

The county systems also have argued that release of pension records violate privacy and could lead to physical or financial harm of members, possibly even suits against the system by members alleging breach of fiduciary duty.

Taking a different view, several county systems, among them San Mateo and Marin, released pension records without a court order. One of the holdouts is the largest county system, Los Angeles.

After the Sonoma County Employees Retirement Association board decided in closed session not to challenge an appeals court decision, their fiduciary counsel said the new ruling is different from previous appeals court rulings in Sacramento and San Diego.

Neil Baker said the Sonoma ruling gives a narrow analytical model that places the name and gross pension amount in the general context of public compensation, bringing clarity to an area that was not resolved in the simple language of the statute.

“The position that the board took in relation to the statute the court found to be fundamentally reasonable,” Baker told the board. “In the end it just simply disagreed that it extended to the specific information, names and gross amount.”

An underlying issue is that the pension records could aid a drive for pension reform, particularly if the focus is on six-figure pensions of $100,000 a year or more, which might seem excessive to many persons.

The records obtained by a reform group from the three state systems and the counties, either by court order or voluntarily, are for retirees in the “$100,000 pension club.” The state records are posted on the group’s website.

“The main thing is to engage people when you talk about pensions, because it’s boring to people,” said Marcia Fritz, president of the California Foundation for Fiscal Responsibility. “When we put the list up, it was the same reaction as ours — unbelievable.”

Fritz said the lists help taxpayers “connect the dots,” showing where their tax dollars are going as government programs and services are cut to help fund pensions that are now rare in the private sector.

She said the lists also are a reminder that “upper management,” which advised policymakers on pension increases, “lined their pockets” and share in the higher pensions critics say are unaffordable.

The California Public Employees Retirement System says only 2 percent of its retirees have pensions of $100,000 or more a year. The average pension for state workers retiring during the last fiscal year was about $38,000.

After the San Diego county system released pension records early this month, Fritz held a news conference with Councilman Carl DeMaio, who is running for mayor and co-sponsoring a ballot measure to switch new city hires to 401(k)-style plans.

At the Oscar-themed news event Fritz’s group gave the third annual “Hall of Shame” awards to 10 recipients of big pensions, four from the San Diego County system.

“The awards ceremony kicked off with foundation President Marcia Fritz walking across a short red carpet laid out in front of a podium while displaying an Oscar-like statue with a picture of a lemon pasted on the front,” the San Diego Union-Tribune reported.

Fritz said the idea for a “$100,000 pension club” came from DeMaio. He obtained records for a “$100,000 pension club” from the deeply troubled San Diego city pension fund in 2003, an aide said.

Apart from the initial wow factor, what are the county pension records showing?

The biggest pension on the San Diego county list goes to a former superior court chief executive, Stephen Thunberg, 67, who retired in 2002 with pay of $178,500. He now has a pension that has grown to $239,942 a year, the Union-Tribune reported.

In Ventura County records showed that “more than 300 county government retirees are drawing pensions exceeding $100,000 annually, often for tens of thousands more than they earned in base pay,” the Ventura County Star reported in May.

The boosting or “spiking” of pensions by manipulating the final pay on which they are based, along with years of service and age, is a long-standing issue in Ventura County.

A landmark state Supreme Court decision in 1997 in a suit filed by Ventura County deputy sheriffs said nearly all types of pay except overtime must be counted toward 1937 act county pensions, including cashing out unused vacation and sick leave.

A later ruling said the decision was retroactive, resulting in a windfall settlement for some retirees. Anti-spiking legislation for CalPERS was enacted in 1993, but similar legislation for the county systems failed, leaving them notoriously generous.

The Contra Costa Times reported in 2009 that two Contra Costa fire chiefs, ages 50 and 51, retired with pensions well above their final pay (salary $221,000 and pension $284,000 in one case), sparking a round of stalled anti-spiking legislation.

After winning a lawsuit, the Sacramento Bee reported in July that six-figure pensions from the Sacramento County system soared from 44 in December 2005 to 283 last year.

“But instead of retiring, some of those pensioners are choosing to take jobs at a different government agency, while others return to the county to work as contract employees,” said the Bee. It’s often called “double-dipping.”

The Los Angeles Times has asked the Los Angeles County Employees Retirement Association to release pension records. In July the system’s attorney mentioned the pending appeal of the Sonoma ruling, since upheld, as one reason for denying the request.

“If this case were to reach a decision contrary to that in the Sacramento and San Diego cases, the issue would almost certainly have to be finally decided by the California Supreme Court,” Christine Roseland said in a letter to the Times.

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at https://calpensions.com/ Posted 19 Sep 11


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