Conflicts abound

City Council must reform pension board

Is it sensible for members of San Diego's municipal pension board to be beneficiaries of the very retirement system they oversee? Should the trustees be permitted, as they currently are, to vote on their own benefit levels – which, not coincidentally, have skyrocketed in recent years?

There is no way to paper over the disturbing fact that pension board members who are city employees or retired city employees – and that includes nine of the board's 13 trustees – have blatant conflicts of interest. When they vote to expand pension benefits, as they have repeatedly since 1996, they stand to profit personally. What a deal.

These glaring conflicts of interest, under which municipal workers and their unions exert unquestioned control over the pension board, help explain why San Diego's retirement plan is one of the most lucrative in the country. In fact, pension benefits are so lavish that some city workers receive larger checks in retirement than they did when they were on the city's payroll. Thus the wisecrack heard so often at City Hall: "I can't afford to work."

California law stipulates plainly that "city officers or employees shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members." On its face, San Diego City Employees' Retirement System (SDCERS) board members who are current or future recipients of city pension payments are in violation of the law, specifically Section 1090 of the California Government Code.

This is why the pension board held an emergency session last week to address the issue. After hasty consideration, and amid considerable confusion, the trustees voted 10 to 2 to approve a resolution aimed at "abrogating" the state law.

In essence, the resolution declared that, because the city charter stipulates that the pension board be composed of representatives of the city manager, unionized firefighters and police officers, city retirees and other municipal employees, the state law against conflicts of interest does not apply. If only it were so simple – that the pension board could exempt itself from state law by passing a resolution.

The pension board's disarray on this matter underscores the critical importance of revamping the panel's composition to eliminate its glaring conflicts of interest. Mayor Dick Murphy's Pension Reform Committee has recommended that the current structure be replaced by a seven-member board whose members would have no personal financial stake in the votes they would cast.

Accordingly, persons would be prohibited from serving as trustees if they were "city employees, participants (direct or indirectly through a direct family member) of the SDCERS, nor a union representative of employees or participants. Appointees shall not have any other personal interests which would be, or create the appearance of, a conflict of interest with the duties of a Trustee."

San Diego taxpayers have been grievously ill-served by city officials overseeing their own extraordinarily generous retirement plan. It is long past time to cleanse the pension board of its conflicts of interest. The City Council has an obligation to put this essential reform of the city charter on the November ballot.