The City of Vernon failed to provide adequate documentation for its employees and improperly characterized some as working in safety classifications that receive more generous retirement benefits, according to a new report released by CalPERS this morning.
The incomes of about two dozen current, former and retired city workers could be affected, since the fund will make "adjustments to retirement benefits or reported compensation" as appropriate, CalPERS said in a press release issued this morning.
Vernon has been under scrutiny for quite some time. Assembly Speaker John A PÃ©rez authored legislation last year to dissolve Vernon, saying it would address allegations of corruption in a city that is home to fewer than 100 residents but more than 1,000 businesses. Under his proposal, which failed, Vernon would become an unincorporated part of Los Angeles County.
The report caps CalPERS' year-long audit of Vernon's records covering July 1, 2002 through June 30, 2010.
Among the findings:
Attorneys were erroneously reported under a safety coverage group, resulting in enhanced benefit formulas. CalPERS will reclassify the City's attorneys to the appropriate lower benefit formula, from 3% at 55 to 2.7% at 55.
Some employees were incorrectly enrolled and received additional years of service credit for which they were not entitled. CalPERS is denying all Additional Retirement Service Credit purchases until membership eligibility is proven.
Sufficient information to determine the accuracy of retirement benefits, reportable compensation and membership enrollment was not provided by the City.
The City over-reported special compensation, including longevity pay for its former City Administrator, and failed to properly report various elements of payroll. CalPERS is moving forward with individual determinations that may affect active, inactive and retired members.
The City did not notify CalPERS that an Elected Officer was convicted of perjury that could result in the forfeiture of years of service.