Saturday, October 7, 2017

Was Encinitas' 2005 pension increase illegal?

The California Policy Center has found that many cities did not comply with state law when granting employees huge pension increases in the early 2000's.
In 1977, the Legislature enacted California Government Code Section 7507, which provides:

“The Legislature and local legislative bodies shall secure the services of an enrolled actuary to provide a statement of the actuarial impact upon future annual costs before authorizing increases in public retirement plan benefits. An “enrolled actuary” means an actuary enrolled under subtitle C of Title III of the federal Employee Retirement Income Security Act of 1974 and “future annual costs” shall include, but not be limited to, annual dollar increases or the total dollar increases involved when available.”

“The future annual costs as determined by the actuary shall be made public at a public meeting at least two weeks prior to the adoption of any increases in public retirement plan benefits.”
Suffice it to say, the CPC hasn't been able to find the required analysis in records at many of the cities and agencies that passed the massive pension increases that are now crippling their budgets.

Did Encinitas comply with the law? The required actuarial analysis certainly doesn't appear in the 2005 agenda item. We doubt it exists anywhere.

But does the public have any recourse if staff and council illegally gave themselves massive, retroactive pension increases? We shall see.

The California Policy Center offers an instructional guide for anyone seeking to challenge those increases.


  1. Well that the city has broken the law is no surprise, hoping that the pensions and salaries can be rolled back and/or recovered is pure fantasy. Muir will be the first to raise his torch and pitchfork in protest. Good luck though taxpayers support the idea of lower costs.

  2. I was at that 2005 council meeting. I don't remember any talk of an actuarial report. It was all talk about how flush CalPERS was and there was plenty of earnings from investments to cover the costs.

    It was a monkey see-monkey do decision. All the other cities were doing it. Council members were looking ahead to elections in the coming years. Nothing like giving a raise in benefits to boost re-election chances.

    1. I spoke against the raise at that Council Meeting, saying I didn't think our City could afford to take on the debt, in the long run. Jerome Stocks, then Mayor, as I recall, said the city couldn't afford NOT to pass the increase.

      As I recall, there was no discussion of any actuarial report. There was very little, if any analysis of increasing the debt load, only political posturing and catering to the employees union.

  3. The employees in the audience literally cheer when Stocks and clan (and dead now Maggie) approved the illegal action.

    Reverse the worse screwing to the taxpayers in modern history and throw Jerome in jail today.

    1. I gladly settle for just the rollback.

    2. I'd more gladly settle for the rollback and Jerome in jail.

  4. Have you noticed that Sacramento is and has been run by the Democrats and their Union Bosses for a long time! Good luck with that one. Maybe someone should ask Assembly Candidate Tasha where she stands of this one. My bet is that she sides with the unions, because the Democrat Party. told her too.

    1. Dems, unions, and Tasha have nothing to do with an illegal vote. Prove that one in court and the party politics will mean nothing.

  5. The link to the 2005 agenda is typical of how cities simply ignored 7507 by not mentioning a thing about there being a new formula built into the new CalPERS contract. This agenda should have said something like "City enacting new pension formula for Safety employees. The increased benefits will cost the city $_____ dollars the first year an grow at a rate of 4% per year (the increase in payroll) costing a total of $____ over 30 years."

    In the meeting package there should have been a spreadsheet showing the dollar cost each year into the future. These costs grow as payroll grows because pension formulas are calculated by multiplying final salary x formula x years of service..

    The fact that none of the cities or counties I have look at complied makes me believe there was collusion between CalPERS and city staff to not inform the public regarding what any of them were doing.

    It should have been clear to every agency that taxpayers deserved to know about a decision that would increase pensions 50%. I think they knew if they did provide the cost and tell people the enhancements were retroactive to the date hired people would have protested loudly.

    You don't want to sound the alarm as you are robbing the bank.

    Ken Churchill