Specifically, Richman is concerned about by the granting retroactive pension benefits to hundreds of thousands of government workers. Richman made his request to Attorney General Bill Lockyer based on a recent report by the Kroll Audit Committee that found intentional underfunding of the $1.4 billion San Diego pension fund (see Audit: SD Broke Law in Connection with Pension Debacle ).
“California taxpayers face decades of escalating payments for the nation’s most generous retiree pension and health care benefits and there is compelling evidence the California Public Employees Retirement System is manipulating actuarial assumptions to conceal the true cost of the benefits,” Richman wrote in the letter to Lockyer, according to the Daily News.
Third Time a Charm?
It is the third time Richman has tried to get an investigation of the $208 billion CalPERS fund, according to the Los Angeles Daily News. He also has introduced legislation that would have required an audit of CalPERS (see Proposed Bill would Impose More Scrutiny on CalPERS ) and another that would have allowed state employees to opt for 401(k)-style retirement plans (see CalPERS Votes Against State Pension Overhaul Bill ); however, those efforts died in committee.
The Daily News says that in his letter, Richman said the CalPERS board adopted a funding schedule for retroactive benefits provided by SB 400 in 2000, extending the payment schedule for those benefits past the average remaining work life of the employees eligible to receive them. He has questioned projections that CalPERS provided to the state during the adoption of the Senate bill that provided retroactive pension increases for state employees, lowered retirement ages, changed actuarial methods and paved the way for local agencies to do likewise.
Over a decade, Richman said CalPERS underestimated how much the pension increases would cost by $12 billion and used accounting practices that obscured the long-term costs.
Richman’s office said the Attorney General’s Office has agreed to a two-month public comment period on Richman’s request. Lockyer then will issue an opinion, according to the Daily News.