It's Time You Joined CSPP
Marin citizens need to band together to deal with a real financial crisis that threatens our way of life. We are a nonpartisan group with a single mission. We can make a difference, but we need your support. Please review our reports and news of our activities on this website, then click here to join.
"Your group is awesome."
Jack Dean, Editor Pension Tsunami
VP, California Pension Reform
VP, California Foundation for Fiscal Responsibility
CSPP SURVEYS POLITICIANS ON GRAND JURY FINDINGS
Survey Results are In. Click Here.
Over 130 political leaders and appointees who serve the interests of Marin residents are being asked to respond to a survey about an April 16, 2015 Marin Civil Grand Jury Report titled Pension Enhancements: A Case of Government Code Violations and A Lack of Transparency.
The survey solicits the opinions and positions of Marin's leaders, which will be posted on this website and released to the media.
We Must Solve Marin's Pension Crisis Now!
Marin Taxpayers may be obligated to pay under-funded retirement pension benefits that are estimated between $700 million and $1.2 billion.
The impacts of this pension disaster will be felt soon as Marin County struggles to meet its generous and unsustainable retirement promises amid declining property tax revenue, unrealistic investment projections, and more.
Public Sector retirement benefits have grown dramatically over the years thanks in large part to the political influence of labor unions. State workers routinely retire at 55 years old with pensions higher than their base pay for most of their working lives.
Pensions are at the center of what will be an intensifying fight for diminishing resources from which government can pay for schools, police and fire services
Attention All Pension Reform Groups in California!
Please contact us about sharing resources, collaborating, getting a group started in your town and more! Contact
BREAKING NEWS - JANUARY 2016
CSPP PETITIONS COURT TO REQUIRE RETIREMENT BOARD TO ADDRESS VIOLATION OF ITS CONSTITUTIONAL DUTIES
On January 14, 2016, David C. Brown, a member of Citizens for Sustainable Pension Plans, filed a petition for a writ of mandamus with The First District Court of Appeal of California asking that it take certain actions with regard to the Board of Trustees of the Marin County Employees’ Retirement Association (MCERA). Download Petition. Download Marin IJ
OVERVIEW & CHRONOLOGY OF EVENTS
In 2015 the Marin County Grand Jury concluded that four jurisdictions (agencies) failed to comply with the requirements of CA Government Code Section 7507 prior to approving pension enhancements. The four agencies are the County of Marin, the City of San Rafael, the Southern Marin Fire District and the Novato Fire Protection District.
In their required responses to the Grand Jury all of them effectively said they had not fully complied with 7507. Yet, they did nothing. Why? CSPP surmises that it is because they are “political animals” and that doing nothing was the path of least resistance.
Although the Grand Jury did excellent work, it missed one significant opportunity in not requiring a response from the board of the Marin County Employee Retirement Association (MCERA).
In October of this year CSPP picked up the baton and has attempted to convince the Board to do the right thing.
The right thing to do would be to acknowledge (1) that there is, at the very least, a prima facie case that the benefits were unlawfully granted, (2) that it may be prohibited from paying them, (3) to place on its agenda a discussion of the topic, and (4) ultimately, to petition a court of appeal for guidance.
The documents below were received as a result of a California Public Records Act (CPRA) request made by Citizens for Sustainable Pension Plans to MCERA. All are public documents. All should be read.
Also publicly available is the audio recording of the MCERA Board meeting dated December 9, 2015 at which CSPP spoke in open time and in public comment after both the "trustees' comments" and "future meetings" sections of the agenda. It will soon be available on this website.
LETTER TO RETIREMENT BOARD OF TRUSTEES
Recently the press has been full of news about former Orinda-Moraga Fire Chief Nowicki and the action taken by the Contra Costa retirement board to reduce his pension and to recapture improper payments.
The following statement caught my eye. “It seemed to us that under the circumstances presented to this board that constituted improper behavior,” said Harvey Leiderman, the board’s attorney. “I’m not calling it illegal behavior. But I’m saying it is improper behavior, in our opinion.” Apparently, even "improper" behavior, behavior that has not been found to be illegal, is sufficient to void a pension increase and to recover overpayments. (READ MORE)
OCTOBER 5, 2015
RESPONSE TO CSPP BY LEGAL FIRM REPRESENTING THE BOARD
The Marin County Employees' Retirement Association (MCERA) Board of Retirement and Retirement Administration received your letter dated September 14, 2015, the Board Chair and Administrator have asked me to respond to you on their behalf.
The reference in your letter to the recent press articles describing actions taken by the Contra Costa County Employees' Retirement Association (CCCERA) Board of Retirement with respect to retirement benefits paid to former Orinda-Moraga Fire Chief Nowicki is interesting in light of MCERA's current challenges with a similar topic. (READ MORE)
DECEMBER 7, 2015
CSPP POINT-BY-POINT ASSESSMENT OF BOARD'S LEGAL RESPONSE
In conclusion, Ms. Dunning’s analysis of my letter to the board was inaccurate and incomplete. She admits she did not have all the facts and did not examine all the relevant points of law. She relied on a “suspicion”, one that was incorrect. She cited inappropriate and irrelevant cases. She made a sweeping generalization that did not allow for any exceptions. She set up a construct that ties the board’s hands so it may not act even when the facts are clear.
Ms. Dunning’s letter was not an unbiased analysis of the issues raised by my letter. It was an advocacy piece designed to make a potential problem go away. Ms. Dunning has disqualified herself from any further participation in this matter. (READ ASSESSMENT)
DECEMBER 9, 2015
CSPP ADDRESSES THE RETIREMENT BOARD
Good morning trustees. My name is David Brown. I am from Mill Valley and I am a member of CSPP. As I am sure you know, a retirement board of trustees may pay only benefits that are lawfully adopted. If a board of trustees has knowledge, or even suspects, that benefits were not lawfully adopted, it is required to petition a court of appeals for instructions.
California Government Code section 7507 lays out very specific requirements in both procedure and timing for disclosure to the public of the future costs of proposed pension enhancements.
The Marin County Civil Grand Jury in April 2015 found multiple violations of section 7507 by four Marin Agencies. Two of the four agencies, The County of Marin and The City of San Rafael, in their required responses to the Grand Jury effectively conceded they did not comply with the requirements of section 7507. The other two, Southern Marin Fire and Novato Fire Protection, either did not respond directly or said they cannot find evidence they complied with 7507. So they, too, effectively conceded the increases were not lawfully adopted.
To put this failure to fully comply with section 7507 in some perspective, CalPERS considers compliance with 7507 so important that it now requires agencies to certify in writing that they have complied with its requirements.
Please note that Calpers does not require certification of partial compliance, substantial compliance, or some other less-than-full measure of compliance. It requires certification of compliance. Period. Importantly, CalPERS will not fund a retirement benefit unless an agency has certified such compliance.
In light of the failure by the four agencies to fully comply with section 7507, what does your fiduciary duty now oblige you to do? Should you continue with business as usual? Should you perform your own independent investigation? Should you petition a court of appeal for guidance? The answers to all these questions are obvious. (READ MORE)
DECEMBER 7, 2015
CSPP IDENTIFIES CONFLICT OF INTEREST AMOUNG RETIREMENT BOARD MEMBERS
The “public service exemption” to conflict of interest rules as described by the court in the Lexin decision relies on members of the board having, in the words of the court, “a shared interest with the entire membership of the retirement system” and with the “membership as a whole.”
For the purposes of this discussion, MCERA’s membership is divided into two mutually exclusive groups, and these groups have different interests. (READ LETTER)
DECEMBER 16, 2015
CSPP PROVIDES LIST OF SPECIFIC QUESTIONS FOR RETIREMENT BOARD
Dear Board of Trustees,
A retirement board of trustees may pay only benefits that are lawfully adopted. California Government Code section 7507 lays out very specific requirements in both procedure and timing for disclosure to the public of the future costs of proposed pension enhancements.
... Thank you for listening attentively to CSPP's presentation on December 9, 2015 regarding the good faith issues raised by the Grand Jury as to compliance with California government code section 7507. These issues raise in our minds the necessity of the Board to agenda the item for discussion purposes leading to an investigation and clarification by a court. We raised a number of reasons for our conclusion and asked questions as well. (READ LETTER)
JANUARY 13, 2016
CSPP ADDRESSES THE RETIREMENT BOARD
Board of Trustees and Mr. Wickman,
Last time I was here I spoke at some length about possible failures of this board in its fiduciary duties to its plan members and possible failures in its duty to the public to minimize employer contributions.
I have since learned that your duty to the public is not fiduciary, my mistake. Rather, it is constitutional, under Article 16, Section 17, paragraph (b), the so-called contribution minimization provision. (READ MORE)
MARIN CIVIL GRAND JURY REPORT
Left Leaning Brookings Institute asks:
"Are Public Pensions Keeping Up With the Times?" Believes 5% is a more reasonable return assumption. Underfunding is $2.7 trillion not $900 million.
Retirement plans for public employees in the United States face serious challenges: By their own calculations, states and localities are $900 billion short of the funds they need to set aside to pay for benefits they have already promised their employees, write the Urban Institute’s Richard W. Johnson and the Brookings Institution’s Matthew M. Chingos and Grover J. Whitehurst. But the problem is far more serious than currently imagined. What states accountants won’t admit, Chingos, Whitehurst and Johnson argue, is that the funding problem is much worse than states’ calculations show.
Read the Entire Article.
Right Leaning American Enterprise Institute Asks:
"Public Sector Pensions: How well funded are they, really?" Underfunding is $4.6 trillion not $885 million.
Public sector pensions, as of mid-2011, were underfunded by around $885 billion, based on accounting rules established by the Governmental Accounting Standards Board applied to a large sample of plans from the Public Plans Database.3
However, reports from academic economists and nonpartisan government agencies strongly suggest that the true state of public sector pension funding is far worse than suggested by official plan disclosures.
Read the Entire Article.