Former CalPERS chief executive Fred Buenrostro has surrendered his freedom and agreed to cough up the ill-gotten gains from his bribery scheme.
The one thing Buenrostro won’t forfeit is his CalPERS pension – not most of it, anyway.
Buenrostro, 66, will continue collecting his state retirement benefits while he serves the 4 1/2 -year prison sentence he received Tuesday. He’ll have to have the checks sent to a bank account, as federal regulations prohibit him from actually receiving the money while serving time.
Under state law, Buenrostro is entitled to his pension. But his $201,600 in annual retirement pay has been greatly reduced by his criminal behavior.
Buenrostro has had his retirement benefits slashed since September 2014, shortly after he pleaded guilty to a conspiracy charge, a CalPERS spokeswoman said Wednesday. The reduction was prompted by the “felony forfeiture” provision in the state public employee retirement law, CalPERS spokeswoman Rosanna Westmoreland said.
Westmoreland said Buenrostro didn’t fight CalPERS’ forfeiture determination.
$201,600Fred Buenrostro’s original annual pension when he left CalPERS
Buenrostro was earning $238,992 a year in salary when he left CalPERS in 2008. His pension was set at $16,800 a month, based on approximately three decades of service as a state worker. After admitting that he accepted more than $250,000 in bribes, Buenrostro was stripped of more than 2 1/2 years of service time of his tenure at the California Public Employees’ Retirement System, approximately the time frame when he was committing a felony by accepting bribes.
With that, Buenrostro’s gross monthly payout was cut to $11,769, according to Westmoreland.
In addition, Buenrostro also has been required to refund an “overpayment” of around $360,000 he collected since leaving state government. The refund represents difference between the pension he had been collecting, based on the original calculation of his retirement when he left state government, and the new amount calculated after his guilty plea.
Buenrostro wasn’t forced to refund the $360,000 all at once; it’s being deducted from his pension payout at a rate of $5,135 a month, Westmoreland said. The deductions will continue for another 48 months, she said.
By the time he gets out, he will be collecting 70 percent of his original pension – or $141,228 a year before taxes.
The fact that Buenrostro is continuing to get pension payments from the very agency victimized by his crime is irksome to pension watchers such as Dave Elder, a former lawmaker who follows CalPERS proceedings for the correctional officers’ union.
$141,228Amount Fred Buenrostro will receive in state pension benefits annually when he gets out of prison
“I don’t think he should be getting a pension while he’s in prison. That’s ridiculous,” Elder said.
But he acknowledged the law is clear on Buenrostro’s continued eligibility. “That’s the way it is,” Elder said.
Buenrostro won’t actually receive the money in prison; it will go to a bank account, said his lawyer William Portanova. The federal Bureau of Prisons will determine where Buenrostro will serve his time. For the time being, he is being held in the Alameda County jail in Dublin.
Portanova said Buenrostro will face other financial hardships. For instance, under federal law he won’t be able to collect Social Security during his time in prison.
Separately, Buenrostro agreed in February to pay the state $250,000 in a civil settlement, effectively disgorging the lion’s share of the bribes he accepted. He is required to make the payments in five annual installments, starting in August 2021 – several months after he is scheduled to be released from prison.
Buenrostro admitted taking bribes from Nevada businessman Alfred Villalobos, who was attempting to steer pension fund investments to private equity firms he represented.
In addition to the cash he accepted, Buenrostro was paid $387,000 to work for Villalobos’ company for about two years, according to court records.
Nonetheless, the state agreed to the settlement of $250,000 because of Buenrostro’s “representations regarding his personal financial assets and liabilities,” according to settlement papers. If state officials determine he lied about his financial state, they can order him to pay $1.8 million immediately.
Villalobos pleaded not guilty to the charges that he bribed Buenrostro. Shortly before he was scheduled to go on trial, Villalobos was found shot to death in Reno in January 2015 in a case that was ruled a suicide.