By Ed Mendel
Monday, April 30, 2012

Stockton has enrolled three mayors and 14 city council members in CalPERS since 1991, despite a provision in the city charter that clearly states no council member shall receive retirement or death benefits, the Stockton Record reported last week.

The discovery of $276,954 in unlawful city pension contributions comes as Stockton is in the national media spotlight during a last-ditch attempt to avoid bankruptcy, mainly by getting unions to agree to cuts in retirement and other costs.

It’s the latest quirk in the hodge-podge of laws and practices, drawing the attention of a legislative committee, that gives some elected officials pensions, prohibits pensions for other elected officials and allows some to choose no pension.

Elected official pensions are “under consideration” and “may be included” in the proposal made by a two-house legislative committee on pension reform, a co-chair, Sen. Gloria Negrete-McLeod, D-Chino, said at a hearing in her district this month.

The nonpartisan Legislative Analyst’s Office told the hearing that the Legislature has attempted to regulate pensions for elected officials in the past, but has not been completely successful.

A bill two decades ago (AB 3664 in 1994) said that members of all local legislative bodies should not receive pension benefits greater than the “most generous” pensions for non-safety employees.

In San Diego, city council members are eligible after four years of service for a “3.5 at 55” pension (3.5 percent of final pay for each year served at age 55), well above the “2 or 2.5 at 55” formulas for most city workers.

Some council members decline to enroll in the pension plan. The council pensions have been mentioned in the debate over an initiative on the June ballot in San Diego that would switch new city employees to a 401(k)-style individual investment plan.

San Diego operates under its own charter, rather than state general law, and has its own pension system, which was plunged deeply into debt by two agreements between the city and unions that lowered city contributions and raised pension benefits.

A legislative committee analysis of the two decade-old bill raised the question of whether the legislation would apply to charter cities, currently 120 of the 482 cities in California.

“It’s possible that is the reason San Diego doesn’t appear to be in compliance,” Jason Sisney of the Legislative Analyst’s Office told the hearing. “That law has never been litigated as best we can determine in talking to the Legislative Counsel.”

Another two decade-old bill (SB 53 in 1993) made some types of elected or appointed officials, such as board members of school districts and special districts, ineligible for pensions through the California Public Employees Retirement System.

“There are a few cases where water districts have figured out a way around that law,” said Sisney. “I think they have the right to do it under the law. But I am not sure that is what the Legislature intended back in ‘93.”

The analyst said at least two water districts contract with CalPERS for pensions for employees and provide pensions for elected board members through the Public Agency Retirement Services, a trust governed by a board of public agency employers.

Last week the Water Replenishment District of Southern California confirmed that its pensions are through PERS for employees and PARS for board members. The West Basin Municipal Water District did not return several calls.

Part of the rationale for prohibiting CalPERS pensions was that even if providing minimal service and receiving only meeting expenses, board members could get full credit for lifetime pensions.

Some elected officials serve full-time and others do not. The analyst said state controller’s data shows that more than half of all California cities, 252, provide pensions for council members. Most of the counties, 51 of 58, provide pensions for supervisors.

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