CalPERS claws back $636,000 from 2 California cops over ‘manufactured’ retirement deals

The California Public Employees’ Retirement System Board of Administration voted Wednesday to revoke the disability retirement of three former Beverly Hills police officers, and ordered two of them to repay a total of more than $636,000 in benefits.

The three officers — Finn McClafferty, Richard Ceja and Brian Weir — each received an industrial disability retirement from the City of Beverly Hills when they left public employment. That kind of pension plan allows workers to retire earlier because of employment-related injuries, and to receive tax benefits.

In each case, the city of Beverly Hills approved the disability retirement application, according to briefs from their attorneys that also detailed worked work-related injuries. CalPERS approved of the disability pension at the time of each officer’s separation.

CalPERS later received an anonymous ethics complaint suggesting the former officers should not have been eligible for disability pensions under California law. The complaint alleged the city “manufactured” settlement agreements allowing the officers to receive disability pensions in an effort to get them to leave public employment.

California pension law forbids settlement agreements that offer disability retirement to workers as a condition of leaving civil service. The state considers those separation agreements to be equivalent to dismissing an employee for misconduct, and workers who are terminated because of discipline are not eligible for disability pensions.

A subsequent investigation by CalPERS and the Attorney General’s Office determined that the complaint was correct, and the officers had received settlement agreements in which the city agreed not to challenge their applications for disability retirements, according to CalPERS.

“These officers and the city of Beverly Hills were caught manipulating the pension system and the law. As CalPERS and an impartial administrative law judge found, what they did was flatly illegal. CalPERS will always pursue illegal activity aggressively to protect the fund and our members’ retirement security,” said Matthew Jacobs, CalPERS general counsel, in a statement.

The investigation found that McClafferty — who retired in 2015 after 17 years on the job — had allegedly made false or misleading statements in a video that he produced regarding the malfunction of a pepper spray canister. He and the city were involved in litigation at the time of his retirement.

Ceja and Weir were not facing discipline at the time of the separation, CalPERS said, but they were involved in litigation against the city claiming they experienced work-related retaliation.

Ceja took a disability retirement in 2015, after 19 years on the job. Weir put in for disability retirement in 2016, after 20 years on the job.

Ceja and Weir went on to take security firm jobs following their retirements, according to documents released by CalPERS.

CalPERS notified the former officers last year that they would lose their disability pensions because of the investigatiions. They appealed, an administrative law judge who reviewed the matter sided with CalPERS.

The three men disputed the administrative law judge’s findings, citing a series of injuries they had received which precipitated their retirement from the City of Beverly Hills.

McClafferty was eligible for a standard CalPERS pension at the time of his retirement. He does not owe CalPERS money.

Ceja and Weird were not eligible for a standard retirement at the time of their separation. Under the order, which the CalPERS board approved, Ceja will have to repay more than $341,000 in disability benefits received, while Weir will have to repay more than $295,000.

Two CalPERS board members — David Miller and Margaret Brown — expressed concerns about the proposed decision before the board voted on it.

They faulted Beverly Hills, which does not face financial repercussions from the investigation.

“I’m really concerned about the behavior of the City of Beverly Hills in this whole situation. There seem to be no consequences. In fact, this all works out wonderful for them,” Miller said.

Miller abstained from voting, citing correspondence he had received prior to the board’s Wednesday meeting.

Brown criticized the proposed decision requiring former police officers to repay hundreds of thousands of dollars to the City of Beverly Hills.

“I can’t believe that the board is being asked to do this. I’m going to reject the (administrative law judge’s) decision. This is absolutely horrible,” Brown said.

Brown made a motion to reject the judge’s findings, but her motion failed without a second.

In an interview with the Bee after Wednesday’s meeting, Brown said that she was shocked that the rest of the board voted to uphold the administrative law judge’s decision without any discussion.

“I really wish we would have denied the ALJ’s decision and given these men the pensions they deserved,” she said.

This story was originally published June 17, 2021 at 11:43 AM.