Why is the country’s largest public pension asking millions for a handful of pensioners?
Like Sandhu, one day, a decade after his retirement, Souza, now 70, received a statement in the mail from CalPERS claiming that his post-retirement work violated pension policies. She allegedly owed nearly $930,000 in back pay.
She worked just 1,045 hours over the course of 33 months, earning $47,000 gross, according to RGS.
“Now they want to make me pay and have me reimbursed for all of this. I can not work. my health is not so good. I can’t… I can’t do it anymore.
Last year, an administrative law judge agreed with CalPERS, and the CalPERS Board of Directors passed the rulings in November. The retirees, with the help of RGS, are now challenging the case in California Superior Court.
Meanwhile, in the past two months, they have stopped receiving their pension benefits and health coverage in some cases.
“CalPERS needs to find a way to recover because it’s responsible for safeguarding its resources so it can pay all retirees now and in the future,” Rhee tells me.
“I think sometimes, given some of these complex bureaucratic rules, pensioners are probably in the worst position to, one, catch these mistakes in the first place and then, two, pay the full amount.”
David Dowswell, 69, of Vallejo, would have owed $744,000 in back pay to CalPERS stemming from several weeks in 2015 where he exceeded the maximum allowable annual hours of work after retirement if he had worked for the city instead of being an employee of RGS as he thought. .
“Who the hell has that kind of money,” he tells me.
“They are insinuating that I don’t deserve my retirement. All of that should be taken away from me because of this 11 week period, which is insane. I have been contributing for 36 years, some of my own money coming from my paycheck.
“I never thought I was doing anything illegal, even remotely,” Dowswell says. “I’m sure I thought, ‘That’s what they want us to do, so, by God, I’ll do it. “”
CalPERS notes that it is bound by its own enforcement obligations.
“These cases relate only to CalPERS pursuant to the Public Employees Retirement Act,” CalPERS said in an emailed statement.
“An administrative law judge upheld CalPERS’ decision, finding that the RGS contracts were a ‘subterfuge to hide the fact’ that these retirees were in fact the common law employees of these employers. Whatever amounts pensioners are required to repay, they should look to RGS, the architect of this “subterfuge”, for a reward. »
Ultimately, large amounts of arrears may not stick. And in mid-March, a California Superior Court judge ordered a stay that reinstates their pension payments and health insurance until a decision is made.
Yet even the brief halt in benefit payments is holding back a lifeline, and those left temporarily without health coverage have been unable to get prescriptions or get needed medical care. The lingering uncertainty is also a source of lingering anxiety. (The next big court date isn’t until August.)
Dowswell can’t sleep and wonders if he and his wife, who is also retired, will have to sell assets. Sandhu wonders if he might need to go back to work since he has started to dip into his savings.
“I am 67 years old. Who’s gonna hire me again? Sandhu asks with a smirk. “I don’t think I deserve this.
“At the end of the day, it’s us, the individuals, who have to suffer,” he told me.
In a way, the whole situation is the culmination and reflection of the economic shocks that we have experienced over the past decades and of a significantly changed work landscape.
For decades, “we underfunded public services in California,” Rhee tells me. “It comes down to these very individual cases, but I think it ties into this larger issue of how we recruit, retain and compensate public employees.”
The public sector is certainly struggling to compete with the stellar offerings of the private sector when it comes to attracting and retaining highly educated workers with specialized skills.
The direct impact on retirement systems like CalPERS, which has struggled with underfunding, is that fewer people are feeding into retirement funds while more people are drawing from them in retirement. These legitimate concerns could intersect with CalPERS’ feud with RGS.
Of course, filling the undeniable gaps in government vacancies is part of the reason RGS exists.
“It’s not like someone trying to make a quick buck,” Rhee says. “He’s really someone trying to solve a staffing problem in the public sector. That’s kind of the fundamental problem that needs to be solved, and it’s not necessarily the domain of CalPERS. This is a broader public sector finance employment problem.
Whether RGS is seen as a solution or just a palliative, the problem is undeniable and only getting worse, as demonstrated by the invention of “The Great Resignation” and especially the pandemic exodus of teachers and healthcare workers. underpaid and overworked.
Ironically, the promise of a pension is one of the attractions of a job in the public sector.
“It’s supposed to be the light at the end of our career to give us security so we can enjoy our retirement,” Souza told me. “Yes, you give up economic opportunities, but in exchange you get financial security.”
“It doesn’t make me feel safe at all. For the agency that is supposed to represent me and my colleagues, it’s incredible.
“In Your Corner” is a new column that puts monitoring reports to work for the community. If you have a concern, advice or hunch, you can contact “In Your Corner” columnist Marisa Endicott at 707-521-5470 or [email protected] On Twitter @InYourCornerTPD and Facebook @InYourCornerTPD.