Posted On: January 4, 2012

Final Shot Fired in California Pension Transparency Battle?

A Los Angeles judge has issued what may be the last ruling in a years-long battle for pension transparency in California.

Superior Court Judge James Chalfant held on November 15 that the Los Angeles Times is entitled to know not just the names and pensions of retired Los Angeles County employees, but also their start date, years of service at retirement, service years they "purchased," benefit payment options, the formula used to calculate the benefits, and their gross medical benefits. His ruling became final on December 13.

The Los Angeles County Employees Retirement Association ("LACERA") had, for two years, resisted turning over even the names of pension recipients. Finally, after three separate 2011 Court of Appeal decisions held that names and pension amounts must be disclosed, LACERA agreed to disclose the names of its pension recipients, but still balked at disclosing other information like years of service, pension formula and medical benefits received.

Judge Chalfant's 14-page, single-spaced decision interpreted the three Court of Appeal decisions and found that the public had a right to know not only how much a public employee's pension is, but also how it's calculated. He agreed with newspaper reporters and taxpayer advocates who testified that without knowing how a pension is calculated, the public is unable to determine whether a pension has been "spiked" by adding perks to a last year's salary, or "purchasing" service time. "A retiree member's election of retirement options is a necessary component in the calculation of his or her retirement benefits in which the public has a legitimate interest," Judge Chalfant ruled. "A retiree's years of service at retirement, service years purchased, benefit payment options, and the formula used to calculate the benefit all must be disclosed...LACERA's calculation of retirement benefits cannot be evaluated without this information."

LACERA has stated it will not appeal Judge Chalfant's ruling and that it will turn over the records by February 15.

Many of LACERA's tens of thousands of retirees receive six-figure pensions, and at the state level California Governor Jerry Brown has called for raising the retirement age and trimming pension formulas to help the cash-strapped state balance its budget and avoid ever-deepening cuts to education and other services.

Judge Chalfant also ruled in a companion case brought by law enforcement unions that only two of the roughly 7,000 retired sheriff's department employees represented by the unions were entitled to have their names withheld because of security concerns. The unions had brought their own lawsuit against the Times and LACERA, arguing that some of their members had safety reasons justifying withholding of their names. Judge Chalfant gave their lawsuit short shrift, issuing a tentative ruling rejecting all claims to withhold names, and eventually allowing one name to be withheld. The Times agreed that one other name could be withheld after the officer filed a declaration saying he is now in jail and other inmates might harm him if they saw his name in the Times.

In the last two and a half years, eight different California Superior Court judges, in heavily populated Los Angeles, Orange, San Diego, Sacramento and Contra Costa counties, and in Stanislaus, Sonoma and Ventura counties as well, have ruled in favor of pension transparency. Courts of Appeal in Sacramento, San Diego and San Francisco upheld the trial court rulings in Sacramento, San Diego and Sonoma counties. With Judge Chalfant's ruling, it appears the transparency battle is over, and the advocates of openness have defeated the forces of secrecy.

(Full disclosure: the author of this blog, Karl Olson, represented the Times in the Los Angeles case, the Sacramento Bee in the Sacramento case, and newspapers in the Contra Costa and Stanislaus cases. He filed a friend-of-the-court brief in the San Diego appellate case.)