New California pension law protects employer — not retirees — after county’s mistake

A group of Glenn County retirees will have to repay a portion of their pensions due to a mistake made by their former employer after the CalPERS Board of Administration declined to intervene on Wednesday.

Eighteen retirees had sought to keep their pensions whole, citing a new state law aimed at protecting retirees from surprise reductions caused by their employers.

Instead the law will protect the Northern California county from having to repay a portion of the overpayments.

Senate Bill 278, which took effect in January, targeted CalPERS’ longstanding practice of reducing retirees’ pensions and collecting three years’ worth of overpayments when auditors identify mistakes that improperly inflated retirees’ pensions.

But the law only applies to mistakes that caused employees to make extra contributions toward their pensions, which didn’t happen in Glenn County, Administrative Law Judge Wim van Rooyen in a June decision. Glenn County’s mistake involved misreporting pensionable income to the California Public Employees’ Retirement System — so while the error inflated retirees’ pensions, it didn’t require them to pay extra while working.

Separately, Glenn County cited the law in its own filings, saying the new law’s reference to a three-year statute of limitation meant that the county couldn’t be held accountable for overpayments from more than three years ago.

CalPERS has been collecting those older overpayments from employers since 2017. CalPERS’ attorneys said they disagreed with the judge’s ruling on the three-year limit for employers.

On Wednesday, the CalPERS board adopted the judge’s decision, as recommended by its attorneys.

CalPERS attorneys, via the system’s press office, did not respond to a question about whether the system will pursue overpayments beyond three years in the future.

This story was originally published September 22, 2022 at 5:30 AM.