CalPERS’ broken promises mislead and shortchange California state worker retirees
What CalPERS did to former school psychologist Marla Moura should never happen again to any state retiree.
Moura worked first as a mental health worker for El Dorado County, according to a story by The Sacramento Bee’s Andrew Sheeler. After a two-year hiatus, she returned to work as a psychologist for the Galt school district. CalPERS financial advisers told her on three separate occasions that her monthly pension after retirement would be over $5,000 per month.
Based on that information, Moura sold her house in California and made an offer on another house in South Carolina, expecting a comfortable $60,000 annual income. What Moura actually got was $2,842 per month, far below the $5,000 she expected based on what CalPERS told her. She had to cancel retirement and take another job to augment her now-meager pension.
Moura was trapped in a time warp: The first part of her government service took place under old CalPERS retirement rules. In 2013, the Public Employees Pension Reform Act passed, superseding the original rules. She left government service before the new rules took effect, but then she returned for a second stint.
“As a result, she’s receiving a pension based on two formulas rather than the single more generous calculation available to public employees prior to Jan. 1, 2013, ” wrote Sheeler.
Why did CalPERS advisers, and the retirement fund’s online tool for calculating pensions, neglect to inform Moura that her retirement plan would be dramatically altered? Shocked by the errant calculation, Moura hired an attorney to appeal her case to Administrative Judge Coren Wong. It was rejected.
Moura wasn’t the only retiree misled in such fashion. She, along with nine other retirees who got shorted on their retirement benefits, appealed their cases to the CalPERS Board of Administration. The CalPERS board rejected nine of the appeals, including Moura’s. One appeal was held for further review.
The Bee’s story noted that “the fund determined that since she had separated from the public sector for more than six months, the system had to calculate her earnings under two formulas, so it couldn’t apply the higher salary from Galt to the service credit she accrued with El Dorado County.”
The rulings upset some members of the Board of Administration.
“I’m really tired of our members being the ones who end up holding the bag and having to pay the price,” Board of Administration member Shawnda Westly said.
“I think we need to do a better job,” said Frank Ruffino, a CalPERS board delegate for state Treasurer Fiona Ma.
Obviously. Because these errors are ruining the lives of people like Moura, who spent years earning a state pension only to wind up with broken promises.
“I am working with the CalPERS Board in reviewing current regulations and looking at potential legislative fixes that will clarify discrepancies so our retirees can have peace of mind when they retire,” Ma said in the statement.
CalPERS Chief Executive Officer Marcie Frost said the state agency is doing “millions of transactions a year and our error rate is very low.”
The error rate for something this important needs to be zero. Legislative fixes may come too late for retirees like Moura, but they can’t come soon enough for state workers in similar predicaments.
This story was originally published March 30, 2021 at 5:00 AM with the headline "CalPERS’ broken promises mislead and shortchange California state worker retirees."