SDCERS Meeting - February 15, 2008
Reported by Joe Flynn

Retirees: 

    Tom Wolfe was wrong, you can go home again, or so it seems.  I had the opportunity to attend the Retirement Board meeting today and it seemed like old home week.  The full Board was in attendance, all 11 members.  There are two vacancies; one appointed and the Retiree Elective position.  Actually, there are three appointive vacancies but Peter Preovolos and George Murray are serving above and beyond the call of duty and staying at their posts until relieved by an incoming appointed member.  We owe a debt of gratitude to all the Board members, but especially these two men who continue to add their experience and expertise, and a full measure of intestinal fortitude to the Board. From my experience, neither of them seem to have a reverse gear. 

    The Board also received a report on a couple of overpayments to members and the efforts underway to correct the problem.  Most of the overpayments, it seems, result from divorce proceedings which are not always passed on to SDCERS.  In one case, the member neglected to point out that he was in a divorce proceeding which redirected some of his pension to his former spouse.  So he was over paid and the spouse was underpaid.  The problem is being taken care of and SDCERS has an array of options to recover any overpayment.  Staff is also in the process of re-checking all of the family agreements, and the Board will review the overall policy to see if changes are necessary. 

    At each meeting there is always a series of staff reports to update the Board on activities, progress, problems, and proposed actions.  These reports are reviewed in detail at the Business and Governance Committee meeting on Thursday mornings beginning at 8:30 AM the day before the full Board meeting.  If you have not yet attended a Board meeting, you should, and this Committee would be a good one to start with.  They cover a lot of material and present a lot of information.  And there is usually a lot of Committee discussion.  Then you can have lunch downtown, and come back for the Investment Committee meeting in the afternoon which also has a series of staff reports.  Staff reviews the investment picture, and often there are informative presentations by consultants, investment managers, and brokers.

    With the elections coming up, you know and I know that the Pension system will pilloried in the press and the City Attorney will be ranting about "illegal benefits," Court decisions to the contrary notwithstanding. So attend a Board meeting, or at least check out the websites of the City of San Diego Retired Employees Association,  the Retired Firefighters and Police Association, and SDCERS website.  All have tons of information.  Then, when your friends and neighbors ask your opinion on the pension system or statements by candidates you will be able to give them some good information. You don't have to know everything because, in the land of the blind, one eye is King.

    At this meeting Roxanne Story-Parks, Chief Compliance Officer gave an update on the Voluntary Compliance Letter from IRS. One item remains a point of contention for a number of firefighters who were permitted to cash in vacation time to pay for purchase of service agreements.  IRS disallowed this practice and the purchases.  The impacted individuals are now faced with some tough and costly choices on correcting the matter.  To further complicate the issue, the City never forwarded to SDCERS the in-lieu cash that was to pay for the purchase of service agreements.  Bill Scheffler wanted to make sure "that the City bears the costs of their own failures or ineptitude."  IRS should focus their ire on the City.  Board President Tom Hebrank assured everyone that the Board would hold the City's feet to the fire on this issue.

        At this point, SDCERS has completed its assigned tasks on the Voluntary Compliance Program; all that remains is for the City to complete adoption of the required Ordinances.  This must be accomplished by April 27th.  Which brings us to a late unscheduled appearance by the City Attorney with a request  to speak to the Board.  The Board allots time at the start of the meeting for public comment but after some thought on the matter, Board President Hebrank allowed Mr. Aguirre to address the Board even though it was out of order.

    The issue he wanted to speak on was the Voluntary Compliance Program in general and the Union presidential leave program in particular. Mr. Aguirre said that "Larry Grissom [former SDCERS Administrator] permitted these Union President contributions."  And that in 1997 there were two MEA members on the Board which he saw as a conflict of interest.  Mr. Aguirre stated that he had advised this Board of this problem in October of 2004.  He suggested that the Board read his "Interim Report # 26."  Notably absent from this assertion was the role of the Plan Sponsor, the City, in this process of bestowing benefits.  It seems that Mr. Aguirre was looking to SDCERS to fix a problem created by the City.  Can't say I understand the logic in this process.  But it does explain why the Council retained outside legal counsel to complete the necessary action to comply with the IRS ruling on the Voluntary Compliance Program. 

    Following Mr. Aguirre's comments, Pres. Hebrank, pointed out that although Mr. Aguirre may have advised a previous Board in Oct. 2004 he had not advised the current Board since it was not seated until April 2005.  Mr. Aguirre returned to the microphone to protest; Pres. Hebrank pointed out that his public comments were over and the Board was not going to discuss the matter further.  Mr. Aguirre continued to protest, and Pres. Hebrank stated that he was out of order. So it had come full circle; his comments started out, out of order and ended up out of order. 

    So with that little presentation by the City Attorney, to me everything at the Board meeting seemed hauntingly familiar.   I was home again.

Joe Flynn, Retiree