Jun 04, 2019

Retiree Protection Act Secures Pension Promise From Unfair Take-Back

In 2012, a firefighter employed by the City of Davis retired after serving the public for nearly 30 years.

Before retiring, the firefighter twice asked her employer to provide an estimate of her fixed-income benefit – benefits that she and her city had paid into the system to provide funding.

Five years after the firefighter retired, CalPERS, through the employer, had a nasty surprise: After the fact, they decided that some of these promised and paid-for benefits shouldn’t have been allowed.

Accompanying this notice was a bill for $42,000 and a note that the monthly pension payment was going to be substantially reduced.

Even though the benefit was promised and paid for by the employer and the employee, it was the blameless retiree on a fixed income that took the hit. Sadly, there are similar examples in law enforcement and among school employees where a benefit – promised and paid for – was retroactively disallowed.

“Our retired firefighter wasn’t at fault, but they were being asked to pony up and sacrifice a hard-earned retirement,” said CPF President Brian Rice. “That’s not right.

SB 266 closes this cruel loophole. It protects earned retirement benefits that have already been promised and paid-for in cases where a benefit has subsequently been disallowed by CalPERS and the individual has already retired.

It also sets parameters for resolving future disputes over an active and retired employee’s collectively-bargained CalPERS’ pensionable compensation.

Re-introduced after being sidetracked in 2018, SB 266 enjoys strong, bipartisan support in both houses of the Legislature. Final votes will be coming this summer.

“If CalPERS’ pensionable compensation is misapplied, it should be corrected, but that doesn’t mean they should be able to break a promise to a retiree living on a fixed income,” said Rice. “ These benefits were promised and paid for. They should not be taken from a retiree who did nothing wrong.