Retirement Board Update - Meeting of July 29, 2005 - By Joe Flynn

Date: July 29, 2005

Retirees:

   For those of you who left the Retirement Board meeting early, you missed the announcement at the end of the meeting by Larry Grissom that he plans to retire on December 31, 2005. Larry, who is 62, has been with SDCERS for 18 years. I told Larry, "You have given me advice on the retirement system for years, now I can return the favor and give you advice on retirement."
    The search for a new system administrator will begin immediately.
    Public comment speakers were Jim Gleason, Jim Clem of Retired Fire and Police Association (RFPA), and City Attroney Mike Aguirre. Gleason stated that two actions by the Board were unnecessary expenditures; the hiring of a PR firm, and the filing for declaratory relief to resolve the question of legality of pension payments. Board President, Peter Preovolos stated the Board had not hired a public relations firm, and agreed that it would not be a good expenditure of funds. Earlier rumors had circulated on that matter. Jim Clem spoke on DROP interest payment and quoted from a DROP handbook given employees when they signed up. Concerning the withdrawal of DROP funds, Clem traced the history of that idea from an opinion of an outside tax attorney and not an IRS ruling
    Note: A SDCERS report on DROP withdrawal rules is scheduled for the August 19 Ret. Bd. Mtg.    
   
    The City Attorney again stated that the Board should initiate an illegal acts investigation, and suggested that SDCERS not pay the "illegal benefits" to ex Mayor Dick Murphy whose name appeared on the retirement list in the July 29, 2005 agenda.
    On Board agenda items, two appeals, of Adjudicator Denials of Disability, to the Board were continued until next month. Without speaking to the merits of either case, I pointed out that with only seven Board members present today, that the appellants were at an unfair disadvantage. For an appeal to succeed, seven votes are necessary, and at this Hearing that meant 100%, whereas with a full Board of 13 members, the seven votes necessary is a 54% requirement. A full Board should be present to provide a fair appeal hearing. That argument of principle was not persuasive with the Board, but since seven votes were necessary for action, these two cases were continued until next month.
    In a report from the Operations Division, service retirements jumped from 19 in May to 52 in June; an increase of 179%. Over that same time period, retirement counseling appointments also increased by 40%. Salary freezes and possible layoffs may be contributing factors.
    The agenda item generating the most discussion was a report by staff "recommending improvements to the disability evaluation process." These improvements consisted largely of giving the SDCERS Medical Review Officer additional discretion, eliminating the automatic right of an applicant for an Adjudicator hearing, and authorizing staff to conduct follow-up investigations on disability retirements. Jim Clem, RFPA, spoke in agreement that the system needs work but this streamlining seems to take place only on the denial side of the equation. Patricia Karnes, City of San Diego Retired Employees Association (CSDREA), spoke the the difficulty of the disability review process for the individual and that many aspects are antagonistic to the employee. Jim Gleason stated that on disability cases, more information is needed from the appointing authority regarding other job or job duty options to avoid disability retirements wherever possible.
    In the Board discussion, I suggested it was too early for Board action; we had only received this information on Thursday and the members had not had an opportunity to review the report and be heard. Further, if the Medical Review Officer is poised to make a recommendation, I thought it could compromise the neutrality of that fact-finding report. More information was needed on the process of reviewing previously granted disability retirements before action was warranted on this report.
    Staff will develop the processes, and bring them back to the Board with more time for review by both members and the Board.

Board Procedure:     The Board has agreed to a meeting schedule of the second and third Fridays of the month. The first meeting will be devoted to financial matters while the regular Board meeting on the third Friday of the month will consider all other Board business.
    Previous committees have been abolished, with the exception of the Audit Committee, chaired by Richard Kipperman, and staffed by Bill Sheffler and myself. A new Litigation Committee has been established, chaired by Peter Preovolos and staffed by Mark Sullivan, and Steve Meyer.
    The next Board meeting is scheduled for August 12, and will be devoted to Financial matters.
    I will be out of state during that time, and will be unable to attend the RFPA Directors meeting, and CSDREA meetings.

Joe Flynn, Retiree Rep. to the Retirement Board