Thursday, July 8, 2010
Retirees: This UT editorial is from July 3, the same date as my letter to the editor which follows. I held it in the event that my letter would make the cut -- hope springs eternal. But alas, it was not to be, so here is the editorial and my age dated letter to the editor.
Joe Flynn, Retiree
New rebuke to pension board
Third court ruling since March underscores SDCERS' bad judgment
By Union-Tribune Editorial Board ,
Saturday, July 3, 2010 at 12:02 a.m.
City Attorney Jan Goldsmith's latest court victory in his serial battles with the San Diego City Employees' Retirement System isn't just good news in that it will save the cash-strapped city $18 million. It is further evidence of the SDCERS board's dubious judgment.
In a decision issued June 17 but not publicized until this week, Superior Court Judge Jeffrey Barton said the 956 city employees hired from July 2005 to February 2007 were not eligible for the Deferred Retirement Option Plan, known as DROP, and were not guaranteed retirement health benefits. DROP allows employees to receive pension payments while still working for the city.
These benefits were to be denied to workers hired after July 1, 2005, under labor deals negotiated by the city. But because the City Council didn't formally adopt the contracts for another 20 months because of then-City Attorney Michael Aguirre's unproductive legal maneuvering related to DROP, SDCERS said the 956 new hires should get the benefits.
Barton said these workers, when hired, had no expectation of receiving the benefits and so denying them these benefits did not amount to a punitive retroactive decision. He sided with Goldsmith in a summary judgment, meaning he saw no need for a full trial on the arguments put forth by SDCERS.
This is third court ruling since March that found SDCERS was trying to "illegally pass on costs" to city taxpayers, Goldsmith said in a news release. "SDCERS should stop these expensive crusades and, instead, focus on the job of wisely investing retirement plan assets."
In an e-mail, however, CEO Mark Hovey offered no apologies for SDCERS' approach and said if "this decision is allowed to stand," the city needed to act in more timely fashion in codifying future changes in pension rules "by ordinance."
The SDCERS board will consider whether to appeal the ruling on July 9. Before then, we hope every board member reads Barton's brief ruling. Those who do may find themselves in agreement with Goldsmith about SDCERS' "crusades."
Unpublished letter to the Editor
Letter to the Editor: (Sent July 3, 2010)
"Consider the Source of the Problem"
Your 7-3-10 editorial on New Rebuke to Pension Board fails in basic research and reporting. You touch lightly on ex city Attorney Mike Aguirre's "unproductive legal maneuvering" but allusion does not equal information. The simple fact is that Aguirre failed to move Council intent into the Municipal Code. That failure created a legal dilemma. SDCERS was faced with a Council "intention" to eliminate DROP and an adopted Ordinance which permitted the DROP benefit; a no win situation. Fail to accept the DROP applications and be sued by the applicants or accept applications and be sued by the City. Both could have been avoided by timely adoption of the implementing ordinances.
Also questionable is the stated $18 million savings. The only published report on DROP (by the City) stated a savings of $48.5 million from inception through 2005. And don't forget, DROP was a City program established to prevent an exodus of long term employees. Failure to understand that fact and the rush to limit the program benefit had the opposite effect with some 600 employees leaving last year.
So, if a rebuke is in order, the ex City Attorney is first in line, followed by whoever did the math on the $18 million savings.
Joe Flynn
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