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— While working 30 years for the City's Water Department, Yvonne Paczulla wrote an in-house column with news of births, marriages, and other domestic matters. She called it Under Water. She didn't realize how prescient she was. A retiree since 1988, she now grumbles, "I am very upset about the pension plan," which she knows is underwater by at least $2 billion. "There has been a lot of monkey business and hanky-panky."

That's obvious to anybody who follows the news. Nonetheless, a surprisingly large number of former city employees who, like Paczulla, retired before mid-1997 and did not receive munificent benefits still have faith in the City or retirement board, or both. They believe they will get their benefits, meager as they are, even if the City goes bankrupt.

"The vast majority [of retired people] are convinced they will get their retirement," says Nancy Acevedo, president of the City of San Diego Retired Employees Association. "They probably believe in [the retirement board]. We've never seen the City in this kind of situation before, so we trust [the board] and also still trust the City," despite pending criminal charges against representatives of both.

To a vocal minority of retirees, such confidence in the pension board and City appears to be a case of "screw me once: shame on you. Screw me twice: roll me over, lay me down, and do it again."

"If the system goes broke and a bankruptcy judge takes over, I'm concerned that a bunch of fancy lawyers representing the policemen and firemen will rush down to court and get as much as they can," while older retirees, who can't afford high-priced lawyers, get taken to the cleaners again, says Dave Wood, who retired in 1994 as a deputy director of the Communications and Electrical Division.

Jim Gleason, who retired in 1982 as director of Environmental Quality and spent 12 years on the pension board, says that older retirees "could get 60 cents on the dollar, and they have low pensions to begin with. Older retirees have not gotten their fair share, and it could happen again."

The older retirees have been fleeced in several ways. First, their monthly payments are far lower than the ones current workers are slated to receive. For example, Wood says, "My retirement is 53 percent of my top salary. If I had retired today, it would be 90 or 100 percent."

Then there are the extras the older retirees didn't get. Beginning in mid-1997, employees were granted juicy retirement benefits such as the double-dipping Deferred Retirement Option Plan (DROP), by which employees declare they will retire in five years and during that period draw their salaries while banking a similar sum with interest, then retire with a monthly stipend as well as a lump sum.

Today's employees can also purchase years of service at a discount -- thus increasing their retirement income. Older retirees couldn't purchase years of service -- with or without a discount -- when they were working.

More than one-fourth of city retirees have benefit levels below the federal poverty line, and more than 40 percent are below the line for a couple, says Gleason. Some older retirees have Social Security income, but others don't. Some have no health-care coverage, and 8.7 percent of city retirees receive less than $500 a month. "A lot of females in clerical positions were notoriously underpaid," says Gleason.

Current employees with their generous payments and fringes plan to retire "with all the money we didn't get," complains June Sandford, who retired from the Street Division in 1981 after 21 years of service. "They are just greedy."

That's the view of city attorney Mike Aguirre, who hopes to rectify the plight of the older retirees. The City's pension system has "not maintained intergenerational equity in the pension plan," says Aguirre. "The current group increased benefits for themselves at the expense of older retirees and future employees." Aguirre says that benefits granted after July 1997 were illegal, representing "property stolen from the taxpayers. The purchase of service credits, DROP," and some other benefits were "created without funding" and should be jettisoned, he says. Not surprisingly, city employee unions scream for Aguirre's head.

Pension-system officials feared the intergenerational inequity even as they approved the underfunding in 2002, according to a report by Navigant Consulting released early this year. In July 2002, after a meeting on the proposal, then-board member David Crow, who voted against it, sent an e-mail to then-administrator Lawrence Grissom. "Several people were voting with their wallets and were not really fulfilling their fiduciary duties," wrote Crow. Some board members were "sitting as a trustee [while] pimping for the city. Seven or eight city employees voted themselves a pay raise and benefit improvements...but none has any concern for the much poorer older retirees."

Amen. But the Navigant report and the pension board offer soothing words that many retirees swallow whole. The pension system "currently has sufficient assets to pay the retirement benefits for all of the current retirees," says the report. But that doesn't take bankruptcy-court haggling or the political pressures of an empty treasury into account. "In bankruptcy, the older retirees will probably get 90 cents on the dollar, but they won't get 100," says attorney Michael Conger, who won one major settlement two years ago and has other suits pending. "But the older ones have extremely modest pensions."

And a surprising number believe they will get them in full. "We are not going to lose our money," says Donald Craig, who has been retired for 24 years after working 28 years with the Street Division. "I have faith. The City screwed up, not the pension fund."

Even in bankruptcy court, "I have a feeling they would leave us alone," says Joseph Sediway, who retired in 1986 after 18 years in Park and Recreation. However, he believes those in the Deferred Retirement Option Plan should have to forfeit some of that double-dipping loot.

The City of San Diego Retired Employees Association has not hired an attorney to protect the older retirees' status. Some members of the group, including Acevedo, retired after mid-1997 and got the special benefits that Aguirre wants to take away. "Our board of directors voted that we should try to remain neutral so that we are not favoring one group over another. But we should protect older retirees on things like health insurance," she says. Just in case the group needs to hire legal help, "We have increased our dues" from $1 to $2 a month, says Acevedo. There are slightly more than 1000 members.

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