CalPERS sued to identify retirees with disability

Two Sacramento Bee reporters hit a roadblock 15 years ago as they checked out a tip that many high-ranking California Highway Patrol officers were filing injury claims as they prepared to retire, giving them generous disability pensions with tax-free income.

CalPERS would only provide the amount of the pension, not whether it was a disability retirement. The reporters, John Hill and Dorothy Korber, had to build a data base of workers’ compensation claims to make their award-winning report that led to reforms and arrests.

The end-of-career injuries became known as “Chief’s Disease,” a label applied by rank-and-file officers. The cause of one of the injuries claimed by the CHP Commissioner then, D.O. “Spike” Helmick, became a Capitol punch line for some: falling out of an office chair.

Now Transparent California, a website listing the pay and pension of state and local government employees, has filed a lawsuit to force CalPERS to identify retiree pensions with a one-word label as “service” or “disability.”

The Nevada-based nonprofit said CalPERS “is unlawfully withholding information necessary to help safeguard the system from waste, fraud and abuse,” citing among other cases “Chief’s Disease” and a Los Angeles Times disability story last year.

“In addition to both the city and county fund of Los Angeles, nearly two dozen of California’s independent pension funds do disclose this information,” Robert Fellner, Transparent California executive director, said in a news release last August.

The California Public Employees Retirement System said disability pensions are exempt from disclosure under state law that protects the privacy of medical information and records submitted to the pension system.

“Compelling CalPERS to identify retirement payments by type — service or disability — would unlawfully deprive members of their individual right to decide whether to disclose their confidential medical information,” Amy Morgan, CalPERS spokeswoman, said last week.

A labor coalition has been granted permission to intervene on behalf of CalPERS: California Correctional Peace Officers’ Association, Cal Fire Local 2881, California Professional Firefighters, and California Association of Highway Patrolmen.

Fellner argued that providing a one-word designation of the type of benefit is not the same as providing medical records, which are properly exempt from disclosure. He said CalPERS is “exploiting” the lack of penalties for unlawfully withholding public records.

“Sadly, the lack of teeth in California’s Public Records Act has effectively negated the presumption of openness enshrined in state law,” Fellner said. “The Legislature must amend the law so that those who violate it are personally liable, just like any other citizen would be.”

More medical information is publicly revealed in CalPERS hearings on disability claims than in a one-word listing of benefit type, Fellner said. In the last five years, said Morgan, the CalPERS board has heard 318 disability appeals.

CalPERS has encouraged public help in identifying disability fraud, Fellner said, by establishing a disability fraud hotline. In the last five years, Morgan said, the hotline received 271 tips, eight resulting in investigations.

“The majority of these calls were regarding potential fraud by local safety members, which were then referred to the local safety agency to review,” she said.

The Transparent California suit, in an example of how publicly identifying retirement could help curb fraud, cited a CalPERS news release on a hotline tip that led to the court-ordered recovery of $203,876 from a former state hospital worker in Coalinga.

“This case demonstrates the great value of the public’s assistance in CalPERS’ efforts to protect the state pension system from fraud, waste, and abuse,” said Matthew Jacobs, CalPERS general counsel.

Disability share of total CalPERS pension payments

The total number of CalPERS disability retirements has declined during the last decade. But work-related “industrial disability” retirements, which often are more generous, increased while standard “disability” retirements unrelated to work declined.

CalPERS had no immediate explanation late last week for the growing trend toward industrial disability since at least 2009, as shown in the Comprehensive Annual Financial Reports.

The total number of disability retirements dropped during the last decade from 76,527 to 68, 977. Standard disability retirements fell from 43,074 to 31,966, while industrial disability retirements increased from 33,453 to 37,011.

And as the drop in total disability retirements suggests, even though spending on disability retirements increased during the last decade, the disability share of total pension costs and total pension recipients fell.

While total CalPERS pension costs nearly doubled during the last decade, going from $12 billion in 2009 to $22.9 billion in 2018, disability costs increased from $1.7 billion to $2.6 billion.

So the disability share of pension costs fell from 14.2 percent to 11.4 percent. As the total number of pension recipients increased from 492,513 in 2009 to 694,570 last year, the disability share of pension recipients fell from 15.5 percent to 9.9 percent.

Fellner said one of the things that caused him to focus on disability pensions was a Los Angeles Times story early last year. More than 1,200 police and firefighters collecting pay and pensions in a special program took injury leaves at twice their usual pay.

“Former Police Capt. Daryl Russell, who collected $1.5 million over five years in the program, missed nearly three of those years because of pain from a bad knee, carpal tunnel and multiple injuries he claimed he suffered after falling out of an office chair,” said the story by Jack Dolan and others.

Russell told the Times it was a defective chair and he believes “the screws underneath came out.”

The CalPERS suit is the first by Transparent California, a project of the Nevada Policy Research Institute, to force identification of disability pensions. Several other Transparent California suits have forced retirement systems to release individual pay and pension amounts.

Fellner said they were “slam dunks . . . It’s been decided. It’s over.”

More than a decade ago the three big state pension systems — CalPERS, CalSTRS, and UC Retirement — all complied when a reform group asked for individual pension amounts for its website listing the “$100,000 Club” of large pensions.

But while several county systems complied, the California Foundation for Fiscal Responsibility and others had to sue more than half a dozen county systems to get the individual pension amounts.

The Transparent California suit to force CalPERS to identify disability pensions was filed in Sacramento County Superior Court. No hearing has been scheduled.

(Click here to read a Bee recap of the “Chief’s Disease” story.)

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at Posted 11 Feb 2019

10 Responses to “CalPERS sued to identify retirees with disability”

  1. Tough Love Says:

    The requirement for Public Sector workers (INCLUDING Police) to be considered “disabled” should be IDENTICAL to the stringent requirements used by the Social Security Administration.

    Taxpayers shouldn’t put up with being “suckered” to pay for these phony “disabilities” ?

  2. philip horner Says:

    There’s another hole in the system. Persons who go to work for the state with a serious %disabled award from the military. I worked with a fella who got paid roughly 100% of an e3 base pay by the military because too physically unable to perform job. His California government job requires him to work unrestricted digging with shovel, climb ladders and scaffolding, shovel snow etc. It’s all a scam.

  3. SeeSaw Says:

    @ Commenters–If there is a state law forbidding such information to be disclosed, a lawsuit against CalPERS is useless. If a military disabled retiree who accepted a job working for the state to do duties he is physically unable to do, he must have provided false information on his application–that would be grounds for dismissal. Even if you had the information as to whether or not a public safety retiree had a disability pension what would you do with the information? I thought so–that is precisely why such information is protected by state law. Perhaps the chief who fell out of his office chair broke a hip.

    @Mr Mendel: As for the income being tax free–last time I knew, half of the income is tax free–if you have evidence saying otherwise, bring it on.

  4. BOPRN Says:

    The disability retirement is a scam, but not in the way most people understand it. The reason most people try to get a disability retirement at retirement isn’t because it gets them a higher retirement payout, but instead it limits the amount of income that is taxable. Prior to retiring, I knew quite a few people who retired on disability, and only one or two were justified. Every single individual who has retired with a disability retirement should be required to have a review annually, that they pay 50% of. The individuals portion would be paid easily from the money they are saving on taxes. The vast majority are scammers, and should be treated as such. Once it has been established that an individual has fraudulently retired, give them the choice of returning to work and paying what they got from CalPERS, or losing the pension. Tired of seeing disability scammers, and county level employee spikers. An FYI, 50% of a disability retirement is tax free. An individual with 50k of income, only is taxed on 25k, and with the new ‘standard deduction’, the entire 50k pension becomes nearly tax free.

  5. Tough Love Says:

    Quoting seesaw ……………..

    ” Even if you had the information as to whether or not a public safety retiree had a disability pension what would you do with the information?”

    The rumor-mill has it that a VERY high % of CHP Officers retire on Disability pensions. Knowing the # and % would help determine if obtaining a disability pension is too easy ….. AND help Taxpayers report (for possible fraud) those “disabled” Officers engaged in strenuous physical activities.

  6. Maria Says:

    These people are the ones that manipulate the system and cause regular citizens to thing that all retires are getting rice when we retire. Some of us get a lot less, still pay taxes, etc. But we all get placed in the same boat as those who know how to cheat the system.

  7. Pedro Says:

    The root cause is that taxes went way too high.

    Once the taxes were low, it wasn’t worth it to cheat on them, but now…

  8. Tough Love Says:

    Maria, While many (perhaps the majority) of Public Sector “disability” retirements are phony, enhancing their otherwise payable pensions, we (Private Sector Taxpayers) are not fooled ………… ALL Public Sector pensions are ludicrously excessive with the value* of non-safety pensions TYPICALLY 2 to 4 times that of comparably-situated (in wages, age at retirement, and years of service) Private Sector workers, and with that 2 to 4 times rising to 4 to 6 times for Safety workers with the richest (and hence MOST costly) pensions.

    * value …. coming from MUCH greater per-year-of-service formula-factors, and MUCH more generous provisions (such as VERY young ages at which full pension can begin, and COLA increases, almost unheard of in Private Sector pensions).


    ALL Public Sector pensions need to be VERY materially reduced, and for CURRENT as well as new workers.

  9. Stephen Douglas Says:

    ” ………… ALL Public Sector pensions are ludicrously excessive with the value* of non-safety pensions TYPICALLY 2 to 4 times that of comparably-situated (in wages, age at retirement, and years of service) Private Sector workers, and with that 2 to 4 times rising to 4 to 6 times for Safety workers with the richest (and hence MOST costly) pensions.”

    canard noun
    ca·​nard | \ kə-ˈnärd also -ˈnär \

    1a : a false or unfounded report or story
    especially : a fabricated report
    The report about a conspiracy proved to be a canard.
    b : a groundless rumor or belief
    the widespread canard that every lawyer is dishonest
    2 : an airplane with horizontal stabilizing and control surfaces in front of supporting surfaces

    And this blog ain’t about aircraft control surfaces.

  10. Tough Love Says:

    Stephen Douglas,

    We BOTH know that my above statement (that you quoted) is accurate …………. but you, being a retired CA Public Sector worker, and collecting one of these “MOOCHER” pensions, simply doesn’t like hearing the truth.

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