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Fresno County files suit over pension method Fresno County, California filed a lawsuit Wednesday against its retirement board to stop a possibly illegal method of calculating pensions that could cost the county millions of dollars. The lawsuit seeks to stop the practice called the "Fresno approach" from being used in the future, but doesn't attempt to lower pensions for people who have already retired. "We're not seeking that at this point," lawyer Don Fischbach said. "That is something the board of retirement is going to have to do and make that decision." The lawsuit claims the county and its employees would have to pay $30 million or more if the practice continues. Hundreds of employees are receiving boosted pensions -- in some cases $1,000 or more a month -- under the "Fresno approach." "Some people are earning more in retirement than they ever made as an employee of Fresno County," Fischbach said. A judge will have 10 days to make a decision, said Fischbach, with the law firm Baker, Manock & Jensen. Lawyers representing the county's largest unions, Service Employees International Union Local 535 and the Fresno Deputy Sheriff's Association, have said they believe the practice is legal and should continue. At issue is how retirement is calculated. Local and regional governments throughout California base retirement on a single year's pay -- or 26 consecutive pay periods. The county, however, calculates final compensation based on the highest 26 pay periods of an entire career. The change reportedly was never approved by the Board of Supervisors or the retirement board and started appearing in retirement handbooks in September 2001. "Nobody can tell you how it started, when it started and who OK'd it," Supervisor Bob Waterston said. "This happened somewhere along the line, and it wasn't by accident." The change generally meant little because the highest pay for most retirees comes during the last year of their careers. But in 1997, Fresno County, along with 19 other counties, settled a lawsuit on retirement benefits that added vacation payouts and other benefits into pension calculations. Fresno County lets workers cash out two weeks of vacation a year, and the added pay comes in one check. Those checks are used in factoring final compensation, spiking pensions. According to the lawsuit, 267 out of 3,507 county retirees receive higher pensions because of the way the county calculates benefits. The county has paid $700,000 in higher benefits for those and expects to pay $6.7 million over their lifetimes. An additional 967 of 1,581 employees eligible to retire could also receive higher pensions under the Fresno approach. Most get less than $100 more a month, but a few get as much as $1,000 or more a month. Former Fresno County Administrator Linzie Daniel receives an estimated $800 to $1,000 in added pension pay each month. His overall pension is about $200,000 a year. He gets more in his pension than he did from his final base salary of $171,496. The retirement board's legal counsel told board members at an earlier meeting the practice was illegal, but the board has allowed it to continue. "Our position is the retirement board has been told that this is illegal and we don't think there's any question that it is," Fischbach said. The retirement board discussed the lawsuit at its Wednesday meeting and voted 4-3 to change to seek new counsel to represent it on this case. "I think the majority of the board felt the past law firm had a potential conflict," board member Tom Abshere said. Copyright ©
2002 Global Action on Aging
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