Saturday, September 24, 2005 | City Attorney Mike Aguirre announced Friday that his office is suing former Mayor Dick Murphy and two convicted city councilmen in Superior Court to stop payment of pension benefits that have been flowing to the resigned officials since they left office in July.
Aguirre, who released copies of the lawsuit Friday, said that monthly retirement checks for Murphy and Councilmen Ralph Inzunza and Michael Zucchet should be halted because the three recent retirees enjoy pension benefits the city attorney claims are illegal.
The city attorney contends that a portion of the benefits are illegal, and that repealing certain benefits or requirements could ultimately leave some former elected officials with thousands of dollars less in annual retirement checks or completely without pensions.
As it stands, Murphy’s annual retirement checks total $49,560 and Zucchet and Inzunza earn yearly pensions of $13,441 and $20,895, respectively, plus cost-of-living increases. If Aguirre is successful, Murphy and Zucchet would not receive a dime and Inzunza’s pension would be docked about $7,000, according to a Voice of San Diego analysis.
Calls placed to Jerry Coughlan, the attorney representing Zucchet in his federal corruption case, and Bob Ottilie, Murphy’s lawyer, were not returned. Michael Pancer, the attorney who defended Inzunza during the corruption hearings, said he did not want to comment on the new lawsuit.
Aguirre said that if he wins the lawsuit against the city’s three most recently departed elected officials, he expects other former mayors, council members and city attorneys to surrender benefits after witnessing others’ losses.
Aguirre said he will try to eliminate benefit upgrades that:
– Permitted all employees to purchase up to five years worth of service credit at a rate that Aguirre said was not financially sound for the retirement system. The extra years could be counted in your pension formula.
If Aguirre prevails on this issue, Murphy’s pension would be reduced to $32,060 and Inzunza’s would be cut to $13,502. Zucchet would not have worked beyond the four years needed to vest, and would not receive a pension.
– Let workers who were short of 10 years of service use purchased service credits to bridge the difference.
If Aguirre is successful on not allowing the gap to be filled, but a court ruled that service credit purchases were legal, Murphy and Zucchet would fall short of the ten years and would not receive a pension anyway. Inzunza’s would be remain at $20,895.
– Allowed elected officials to be guaranteed a pension after only serving for four years. The City Charter, he says, mandates that 10 years of service is the least amount any employee can work before receiving a pension.
Even when allowing purchased service credits to count toward vesting, Zucchet falls short of the 10-year qualifying mark if Aguirre prevails.
– Increased the “multiplier.” Retirement checks in defined-contribution plans such as San Diego’s are calculated using a formula that multiplies an employees’ highest annual salary, years worked and a contractually-mandated figure known as the ” multiplier.”
Under the changes to the elected officials’ plan, the multiplier was changed to 3.5 percent from a complex formula that generally equated to between 3.12 percent and 3.17 percent..
Murphy’s annual retirement would fall to $44,179, Zucchet’s would be reduced to $12,275, and Inzunza’s would be cut to $19,265.
– Benefit officials who had a conflict-of-interest when either voting to approve the enhancements or working on the improvements behind the scenes as a staff aide.
The benefit increase approved in 2000 would be void for those who worked on it, which Aguirre said would include Murphy and Inzunza.
– Were created without an identified funding source to pay for them, which includes retroactive enhancements to work already performed. Such upgrades are a violation of the California State Constitution and the city charter, Aguirre argues.
In July, Aguirre mounted legal challenges to multiplier increases for general service members, which would affect former council aides Zucchet and Inzunza, that were agreed to in 1996 and 2002. Rolling back the 1996 and 2002 enhancements will save the city between $700 million and $800 million of the $1.37 billion-plus owed to the San Diego City Employees’ Retirement System.
A successful rollback of elected officials’ benefits will result in savings “in the millions and possibly the tens of millions,” Aguirre said last month. He said he had the full authority to bring the lawsuit by himself, although some council members disagreed with him.
To learn more about what is at stake for former, current and possible future elected officials, click here.
To view a data table comparing what former, current and possible future elected officials could lose if Aguirre’s lawsuits are successful, click here.
Please contact Evan McLaughlin directly at