The State Worker

Chronicling civil-service life for California state workers

July 26, 2012
Judge: Lawsuit against CalPERS over California prison receiver pension may proceed

Thumbnail image for kelso.jpegA judge has cleared the way for a lawsuit to proceed against CalPERS over an unusual work arrangement that allows California Prison Receiver J. Clark Kelso to continue accruing state pension benefits even though his position was established by a federal court and he answers to a federal judge.

As we have previously reported, Daniel E. Francis v. CalPERS contends that Kelso's employment agreement illegally washes his pay through the state Administrative Office of the Courts so that the money can be factored into his CalPERS pension. Kelso has said the arrangement, while unusual, was vetted, is above board and legal.

Francis, the plaintiff, is a retired state worker and therefore a CalPERS member. CalPERS had argued he had no standing to sue. Sacramento Superior Court Judge Michael P. Kenny ruled that Francis had the right to pursue the lawsuit as a taxpayer.

That decision means that the litigation can now focus on whether Kelso is a state worker on loan from the AOC to the federal court or a federal employee with an illegal pension-spiking arrangement. The receivership corporation reimburses the AOC for Kelso's pay and benefits. Ultimately, the state pays the receivership's costs.

Here's Kenny's ruling from last week:

Francis v. CalPERS

PHOTO: J. Clark Kelso / Sacramento Bee 2009 file, Brian Baer

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at


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