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Tuesday, January 03, 2006 | Working for the city of San Diego must be very dangerous.
Fourteen of every 1,000 people employed by the city end up applying for a disability retirement. Compare that to the rest of the nation, where 0.5 of every 1,000 workers applies for the benefit.
Either working for the city is 28 times more dangerous than other gigs or something’s askew.
How about this: More than 22 percent of the city’s retirees are collecting a disability retirement. That means they’ve abruptly stopped working and started collecting at least half of their salary for the rest of their lives – an outcome of their service that the city did not plan for and that costs millions.
One more? Fully 35 percent of all public safety employees who have retired from the city did so with a disability retirement. To retire on disability from the city, all you have to do is prove that you can’t do your job anymore and that the reason you can’t do your job anymore is because you hurt yourself on the job. It doesn’t matter how long you actually did the job.
Compare these statistics to the rest of the country: Among U.S. residents aged 25-64, only 11.7 percent have a “work disability,” according to the U.S. Census Bureau.
Voice of San Diego recently obtained the final report of a committee that was formed last year to review the city’s disability retirement system. Other findings in that report – in addition to the ones above – have apparently sparked a vigorous reform effort by the city’s pension system at a time when that system’s reputation for vigorous reform is, well, not so strong.
These numbers on disability retirements, however, are apparently just too astonishing to ignore.
Like this one: It costs the city’s pension system nearly $30 million a year to pay all the employees who have retired earlier than anticipated because of their disability.
City law allows employees to apply for a disability retirement that immediately begins paying them half of their highest salary for the rest of their lives or whatever retirement benefit they are already eligible for – whichever is higher. And, as we mentioned, there is a tax benefit.
In fact, the disability committee found that a “large percentage” of people who are collecting disability retirements applied for them after they applied to become part of the controversial Deferred Retirement Option Program. That means they are already retiring from the city, so the only reason to apply for a disability benefit is to get a pension that is largely tax free.
That makes it an “attractive” benefit, the committee found.
Yes, it’s officially “attractive” to claim a disability if you’re a city worker. And that’s made the system ripe for fraud.
“The disability retirement should be a safety net for truly injured workers; it should not be an enabling tool for employees to collect their retirement benefits 50 percent tax exempt nor should it enable workers, if they are disabled, to collect additional income from employment elsewhere,” concluded the City Manager’s Committee to Review the Disability Retirement System in its final report April 14.
In case you don’t have your special “City of San Diego Speak to English Dictionary” let me explain. This means, of course, that the disability retirement benefit has indeed enabled employees to collect their retirement benefits with tax advantages they may not deserve. And because of the way the system works, the committee concluded, people are finding ways to collect disability from the city while at the same time working jobs – where, apparently, they are not disabled.
Here’s some more of that classic city language usage:
“The committee was near unanimous in its desire to stop fraud and ‘double dipping’ by recipients,” reads a memorandum from Sheila M. Jacobs, a lawyer for the retirement system.
“Near unanimous in its desire to stop fraud and ‘double dipping’?” Why not unanimous? Who the hell were the dissenting votes in that one?
The committee met in virtual secrecy most likely to avoid these types of questions. And then it gave its final report to former City Manager Lamont Ewell nine months ago without bothering to do a pesky presentation to the public.
The committee also found that the city and the retirement system have not investigated people who take the disability retirement. In fact, its first recommendation was that the retirement system needed to implement “fraud provisions” and a policy to refer questionable cases to the district attorney’s economic fraud unit.
Because, apparently, the board that oversees the city’s pension system never thought about that. Remember, there’s still an element in this group that doesn’t want to be part of a unanimous stance against “fraud” and “double dipping.”
So who was on the committee? A representative of the city manager, Greg Bych; David Dugan, from the law firm Dugan and Rader; Anne Stephenson, a vice president at Sharp Healthcare; Debra Hollingsworth, a deputy city attorney.
And then there were three others who are, by now, very familiar to those who have followed the city’s pension chaos over the last few years: Retirement System Administrator Larry Grissom, Retirement System General Counsel Lori Chapin and Dick Vortmann, the president of the National Steel and Shipbuilding Co. Vortmann had previously sat on the pension reform committee, which had recommended that the city form the disability review committee.
The problem with that is the pension reform committee should have also recommended that the city and retirement system actually implement the reforms this new committee presented. The city has always been happy to study problems. It’s just never wanted to do anything with the results of those studies.
The only group to act, so far, has been the retirement system, which has formed a – you guessed it – committee to study the problem.
That gets us to the final point. These ideas for reform – like the one that says that a person already eligible to retire shouldn’t be able to get a “disability retirement” and collect half his pension tax free – are not new ideas.
Every time they come up, they’re scuttled in the city’s negotiation process with its employee unions.
“While the (disability) benefit as originally designed by the city, provided for income offsets and other mechanisms to deter fraudulent claims or to otherwise make the benefit less desirable, ‘meet and confer’ agreements made in the mid and late 1980s eliminated virtually all protections of SDCERS and its members,” reads the memo from Jacobs.
My bilingual dictionary translates this sentence to mean “the city and retirement system wanted to protect itself from fraud and other abuses of the disability benefit but then it bowed to pressures from its employee unions.”
And what are the city’s employee unions focusing on when it comes to disability reform?
The police officers had a suggestion: The issue the police officers cite as the most problematic is the “excessive delay” for the retirement system to make decisions on disability retirements.
Maybe they could speed the process up by cutting down on the number of applicants for a disability retirement.