The State Worker

Jerry Brown and CalPERS on course for another pension-law collision

Don’t be surprised next year if Gov. Jerry Brown re-enters the political boxing ring for another around with CalPERS over what kinds of pay can count toward a government retiree’s pension calculations. And don’t be surprised if he loses again.

The governor lost his first tussle with CalPERS Board of Administration last August when the panel voted to keep “temporary upgrade pay” on a long list of special salary enhancements that can be factored into a CalPERS member’s pension. Among the others: longevity pay, police marksmanship certification pay, physical fitness pay, smog inspector license pay, notary pay, cement finisher pay and holiday pay – 99 in all.

Brown, a Democrat who signed a 2013 pension law intended to curb public pension costs, gave tacit approval to 98 of the items on the list. He said nothing about them when they came to CalPERS’ board for a vote on how to apply the new law. But temporary upgrade pay, given to an employee who temporarily assumes a higher-paying position, drew his criticism for violating the law’s ban on factoring “ad hoc” payments into pension benefits.

“Brown was making a modest, even trivial, request: Do not base your pensions forever on a false measure of your high salary … one that is rigged,” said Bob Fellmeth, a public interest law professor at the University of San Diego School of Law.

Meanwhile, labor unions argued that the temporary pay should be included because an employee who receives the money does the work to earn it. Besides, if employers want to hold down those costs, board member and former union president J.J. Jelincic said during a heated CalPERS committee debate, then they could better manage their staffing and avoid the need.

The governor’s appointees on the board tried to remove temporary upgrade pay from the list, but the vote went 7-5 the other way.

Richard Gillihan, Brown’s state human resources chief, sits on the board and cast one of the losing votes. During an interview last week, he predicted that temporary pay – and other supplemental payments – will return to CalPERS’ agenda.

“What should or shouldn’t be included in final compensation is absolutely something that we think needs broader revisitation,” he said. “We hope to see that sooner rather than later.”

It’s tough to see how Gillian would be on the winning side, however, because the board’s composition will lean more heavily toward labor’s interests next year.

Board member George Diehr, a state university faculty union activist, will leave in January. Diehr angered labor interests by joining Brown’s side of the temporary pay debate.

His replacement, Theresa Taylor, won election to his seat with nearly a quarter-million dollars independently spent on her behalf by her union, SEIU Local 1000.

Taylor couldn’t be reached for comment, but Brown might want to look elsewhere for a vote.

Call Jon Ortiz, Bee Capitol Bureau, (916) 321-1043. For more columns, go to sacbee.com/stateworker.

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