We've received quite a few calls and emails from CalPERS long-term care policyholders asking for more details about this week's Assembly committee hearing on the system's program and the long-term care insurance industry in general.

We thought former Assemblyman Dave Elder's comments had the most news value. The rest of the hearing retraced details that we have reported plenty in the last six months or so.

In response to policyholders' intense interest in this topic and their questions about Tuesday's hearing, we've embedded the proceeding's archived video feed above, courtesy of the California Channel. Set aside some time if you plan to watch the whole thing. It's nearly four hours long.

A former assemblyman suggested Tuesday afternoon that the Legislature should consider reining in CalPERS' control of its struggling long-term care insurance program if the system follows through with plans to hike premiums for some policies by 85 percent.

CalPERS' decision to get tougher on dependent eligibility checks for medical insurance presents a ticklish public relations challenge for an agency that has long prided its customer service-oriented reputation.

If the system's amnesty message is too feeble, it will be ignored. Come on too strong, and CalPERS risks backlash from offended employees and retirees.

The California Public Employees' Retirement System today is mailing some 60,000 official notices to long-term care insurance policyholders that a rate hike is coming.

The letter explains that CalPERS is raising premiums 5 percent this year on the plan's costliest policies, which offer lifetime coverage and daily benefit payouts that keep up with inflation.

Policyholders can avoid the premium increases by moving into plans that offer up to 10 years of benefits without automatically inflation-adjusted coverage. The deadline to opt into another plan varies by policyholder.

CalPERS' letter also flags a 5 percent increase planned for 2014 and another 85 percent jump in 2015 spread over two years. All the rate hikes apply to policies offering inflation-protected, lifetime coverage for things like nursing home services and in-home care.

Our story in today's Bee about why a CalPERS accounting change will cost state and local governments billions of dollars references a report about the fund's risk of extreme, even fatal, losses over the next 30 years. We've embedded the report below.

The story also mentions that the actuarial rule of thumb has long been that healthy pension funds' assets equal at least 80 cents of every dollar promised to members. What we didn't mention is that notion was challenged last year by the American Academy of Actuaries in a brief, "The 80% Pension Funding Standard Myth."

The academy said the origin of that standard has no clear origin and that "most plans should have the objective of accumulating assets equal to 100% of a relevant pension obligation."

Annual Review of Funding Levels and Risks as of June 30, 2012

Leaders of the California Public Employees' Retirement System voted this afternoon to speed up payments on the fund's long-term liabilities with an accounting change that will trigger higher contributions of up to 50 percent from taxpayer-funded state and local governments and school districts over the next few years.

The matter will go to CalPERS' full Board of Administration on Wednesday, which will likely approve it.

The new policy will shrink the fund's asset "smoothing" period from the current 15 years to five years. Smoothing gains and losses avoids sharp spikes in the annual pension contribution rates that public employers pay with taxes and fees they collect. Critics said the 15-year period unwisely delayed a full accounting of the $100 billion CalPERS lost after the 2008 financial meltdown.

The accounting changes approved today also will amortize CalPERS' investment gains and losses over a fixed 30-year period. Fixing the amortization period obligates CalPERS to pay its obligations by a specific date. Currently, CalPERS resets the amortization period annually, essentially pushing its debts forward year after year.

The accounting changes won't hike what employees in pay toward their benefits because their contributions cover only "normal" costs, not the total $87 billion unfunded liability that their pension plans have racked up over the last several years.

it's left to employers -- and by extension, taxpayers -- to fill that gap with more money for CalPERS to invest. The policies that the board approved today will force public agencies to kick in more money for at least five years starting in 2015-16 to pay down those long-term debts.

For example, CalPERS estimates that pension contributions for state workers and school-district employees who aren't teachers will grow from about $5 billion to $7.5 billion over five years.

PHOTO CREDIT: Sacramento Metro Fire firefighters put out a grass fire near U.S. 50 and Folsom Boulevard in Folsom. Randall Benton / Sacramento Bee file, 2012

CalPERS' Investment Committee sent a message to lawmakers this morning that the fund opposes a bill requiring it dump its gun manufacturing holdings unless the weapons are made for U.S. military purposes only.

Assembly Bill 761, written by Assemblyman Roger Dickinson, D-Sacramento, comes after CalPERS decided earlier this year to divest about $5 million in gun investments.

"This bill goes well beyond that action," CalPERS analyst Danny Brown told the board this morning.

Of the 11 members present for the vote, 10 opposed the bill. The lone abstention came from the California Department of Human Resources, whose representative voted on behalf of CalHR Director Julie Chapman.

Dickinson's measure is the latest in a long line of bills seeking to limit the investment options of public pension funds.

A bill that would have let unions and retiree groups exploit CalPERS' annuitant mailing list for marketing purposes has died by the author's own hand.

Assemblywoman Shirley Weber, D-San Diego, pulled Assembly Bill 785 one day after she issued an op-ed piece that touted the measure as a way for retirees to stay informed about pension issues.

Then CalPERS staff delivered an analytical beat-down.

CalPERS staff will recommend next week that the fund's board oppose a measure that would make its retiree-address data available to outside groups for non-political mailings.

A scathing analysis prepared for next week's board meeting concludes that Assembly Bill 785 is contrary to the board's current policy on mailing information to annuitants, diminishes the board's authority and "creates legal, financial and information security risks for the System."

The measure, authored by Assemblywoman Shirley Weber, D-San Diego, requires CalPERS to give mailing information to third party direct-mail vendors at the request of groups that represent CalPERS' retiree members. The groups would then use the vendors to mail materials to the retirees. Once the mailers went out, the mailing lists would be destroyed.

A (highly unscientific) poll on this blog shows that 94 percent of those who responded think the bill is a bad idea.

Weber says AB 785 merely aims to educate retirees and that it has built-in cost and security requirements that would repay CalPERS for the cost of servicing the member groups and protect members' personal information.

The analysis counters that about $205,000 in annual administrative costs wouldn't be recouped and that mishandled information would expose the fund to risk of litigation.

Worth noting: AFSCME, which is sponsoring the measure, "previously requested CalPERS to provide names and addresses for a direct mailing under conditions similar to those proposed in this bill and CalPERS did not approve the organization's request," according to the analysis.

RELATED:
The State Worker: Union pushes bill to get CalPERS' mailing list
Poll: Should state open CalPERS' mailing list to interest groups?

130415 Calpers Item 5c by jon_ortiz

Bee columnist Dan Walters digs into this week's Stockton bankruptcy decision and concludes the transcript of the judge's comments on his ruling "imply that the city and CalPERS may not prevail on the pension issue when he weighs the city's plan to deal with its debts."

Click here to read Dan's column.

Read the court transcript for yourself and see if you agree. Judge Christopher Klein discusses CalPERS and the city's bankruptcy plan starting at PDF page 45 (page 588 of the transcript). To jump to that part of the document, just put "45" in the page field at the bottom of the embedded document viewer. Mobile users can click the link to open the transcript.

Transcript 4-01-2013 Judge Klein Ruling in City of Stockton BK case

As we've reported today, Assemblywoman Shirley Weber has introduced a bill that would allow unions and other employee groups to use the fund's member database for direct mailings.

Assembly Bill 785 doesn't allow the groups to exploit the information for political purposes, but other mailers, such as recruiting brochures or informational newsletters, would be permitted. Third-party firms would handle the mailings and destroy the lists to prevent misuse.

CalPERS' staff is still analyzing the measure, so the fund's board hasn't taken a position on it.

We also asked CalPERS whether the member database could be sorted by bargaining unit or union membership, since some groups would probably want to narrow their mailing lists using that data. Fund spokeswoman Rosanna Westmoreland is checking.

What do you think? Take our poll and, if you're using a platform that allows it, leave a comment.

Today's State Worker column looks at a new Assembly bill that would allow unions and and retiree groups to exploit CalPERS' member-address database for direct mailing of non-political materials.

Here's Assembly Bill 785 by Assemblywoman Shirley Weber, D-San Diego:

Assembly Bill 785

With just 400 to 450 words for our weekly State Worker column, most of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

PHOTO CREDIT: Mail bins at West Sacramento's regional postal distribution center. / Sacramento Bee 2011 file, Jos&ecute; Luis Villegas

California state employee retirements rose nearly 8 percent for the first quarter of this year when compared with the same period in 2012, according to the latest data from CalPERS.

The 3,576 retirement applications were just below the record-setting January-to-March period in 2011 when 3,626 state workers took their pensions.

The increase indicates that California's aging state employee population is retiring in greater numbers, a trend that will continue for the foreseeable future, said Elizabeth Kellar, president of the Center for State and Local Government.

"This isn't unexpected," Kellar said in a telephone interview.

Furloughs and labor unrest in 2010 and 2011 likely pushed many state workers to leave a little sooner, Kellar said, which is why the retirement numbers spiked to record highs for those two years before they fell in 2012.

"But now we're entering a more normal environment in terms of the way people make decisions," Kellar said, so the California's retirement rate has returned to the gradual increase that demographers predicted many years ago as baby boomers take their pensions.

More broadly, first quarter CalPERS retirement applications from state and local government employees and school district workers rose by a bit more than 10 percent, to 8,888 from January through March.

CalPERS counts applications from mid-month to mid-month, so the first quarter data includes the second half of December. Owing to the method CalPERS uses to calculate pensioners' first cost-of-living increase, more employees retire at the end of the calendar year than at any other time. Those retirements are counted in the January numbers.

Retiree medical costs rise to $64 billion over 30 years

Storified by Jon Ortiz· Tue, Feb 26 2013 07:10:42

A key CalPERS committee today approved a plan to reopen its long-term care insurance to new policyholders, widen the eligibility pool and introduce a new, cheaper benefit program.

Today's news -- "CalPERS enrollees receive notice of long-term care rate hikes" -- underscored CalPERS' decade-long effort to right a struggling program that pays for things like nursing care and in-home health services. Unlike public pensions, the long-term care benefits are a private insurance plan. Claims are paid solely with earnings from policyholders' premium investments. Taxpayers money doesn't backstop shortfalls.

CalPERS program has struggled for many years, falling victim to loose underwriting standards, a high number of claims and poor investment returns. Many private insurers have fell victim to similar trends, but had a larger pool of policyholders to share the risk. CalPERS has struggled more acutely in part because because it restricted its policies to members. About 150,000 of them hold policies.

State Treasurer Bill Lockyer plans to ask the CalPERS' board today to purge the fund's investments in two companies that make firearms that are illegal in California.

If the board agrees to Lockyer's motion, the nation's biggest public employees' retirement system would divest of a total $5 million invested in Smith & Wesson and Sturm, Ruger.

Last month Lockyer made a similar proposal to the California teachers' retirement system, the second-largest U.S. public pension fund after reports that the fund had a stake in the manufacturer of the rifle used in the Sandy Hook Elementary School massacre.

Here's the text of Lockyer's motion to the CalPERS board:

Investigators have arrested a CalPERS employee today for allegedly stealing the identity of at least one pension fund member.

Authorities booked 40-year-old Koren Lamar into Solano County Jail on suspicion of identity theft, according to a Vacavile Police Department press release. Investigators made the arrest after seizing evidence from two Sacramento locations: a Fulton Fulton Avenue apartment complex and CalPERS' headquarters.

Lamar lived in an apartment on Fulton Avenue.

Vacaville police launched an investigation on Jan. 23 after the victim reported several loans taken out using their personal information and without their knowledge.

"During the investigation officers discovered a connection to the California Public Employees Retirement System, from which the victim is currently receiving retirement benefits," according to the press release submitted by Sgt. Jeff King. "Investigators believed that the personal information used in the loan applications was obtained from a CalPERS database."

Police said they believe that Lamar worked alone. They are continuing their investigation and other victims may surface, but they think the number is "relatively small."

CalPERS spokesman Brad Pacheco said in an emailed statement that protecting members' personal data "is one of our highest priorities. We have had very few instances of this kind and we will not let one individual overshadow our commitment to members."

PHOTO: Koren Lamar / Vacaville Police Department press release

California state workers in nearly a dozen departments hold both a salaried position and another hourly-wage position in-house, according to new government payroll data.

Several hundred managers, supervisors and others in non-hourly jobs also have a rank-and-file position, according to the State Controller's Office. The numbers confirm CalPERS officials' assertion that it wasn't the only department using "additional appointments."

The $265 billion fund came under criticism for the practice after a Bee report that 50 managers and other salaried workers with technical skills had been tapped by CalPERS to receive extra pay for handling computer system and customer service backlogs.

After lawmakers said they were concerned about CalPERS' policy, the fund suspended it, saying that sensationalized media coverage about its business decision was a distraction from its mission. CalPERS says the program was its cheapest option and had saved an estimated $1.6 million in costs since it started in June 2011.

The Bee has called several departments on the controller's list and the California Department of Human Resources, which acts as the state's labor relations branch. None have spoken on the record yet. Watch the print edition of The Bee and The State Worker blog for more details.

The California Department of Human Resources is launching a new web-based training series on Monday that aims to develop leaders and spark cultural change in the state workplace.

The first webinar in the series, "Avoiding Groundhog Day the Movie: Learning from Experience," is set for Monday from 10 a.m. to 11 a.m. Richard Callahan, an associate professor at the University of San Francisco's School of Management, is the featured presenter.

When CalHR replaced the Department of Personnel Administration and took over some of the State Personnel Board's duties, the idea was to create a department that could shake up the state's workplace culture, including its tendency, like most large bureaucracies, to resist change.

Assemblyman Rob Bonta's office says the Alameda Democrat's committee will soon discuss CalPERS and other departments using "additional appointments" for salaried employees.

CalPERS says the practice is legal, above-board and saved $1.6 million by avoiding more expensive options such as hiring and training new employees or contracting outside consultants. The fund gave the hourly positions to salaried employees, including managers, who could lend a hand with severe customer service and computer system backlogs.

The fund suspended the policy last week, saying that sensationalized media coverage had created a distraction from its work and that it planned to phase the program out in June anyway.

Bonta chairs the Assembly Committee on Public Employees, Retirement and Social Security. His office sent this email after we asked for a follow up on his joint statement with Assembly Speaker John A. Pérez about the dual appointments.

Now that CalPERS has suspended its practice of appointing some managers to second rank-and-file jobs that pay hourly wages, we'd like to know what you think of the policy.

If you missed the story, you can catch up here:
Jan. 17: Some CalPERS managers given second jobs, extra money
Jan. 18: Lawmakers say they will probe dual jobs of California state workers
Jan. 19: CalPERS suspends extra pay program for managers

CalPERS has decided to immediately suspend a program that allowed some salaried managers to moonlight in-house and take hourly pay, saying that the controversy surrounding the practice has become a "significant distraction" to its work.

In a statement the fund issued minutes ago, the state's largest public employee pension fund says is ending the so-called "additional appointments" immediately, despite its assertion the practice saved an estimated $1.6 million since June 2011.

The statement doesn't include how many employees participated in the program or what it cost CalPERS in payroll. Earlier this week the fund said it paid 50 managers an average $900 each in November to work in hourly positions.

The number of state workers entering retirement spiked in January, rising 15 percent over the same month one year ago, according to CalPERS.

The fund's monthly report shows that 2,264 state workers applied for their pensions, compared with 1,970 in January 2012. It was the biggest comparative January increase since 2010, when three-days-per-month furloughs and labor unrest contributed to a 31 percent spike in state retirement applications.

Total retirement applications to CalPERS, which include state and local governments and school district employees, rose 3 percent to 4,657.

The fund counts pension applications from mid-month to mid-month, so the January data includes the last half of December. Many state employees retire during that period because of how CalPERS' times initial cost-of-living-adjustments.

Here's a broader view of monthly state retirement figures dating to 2007, with more detailed spreadsheets at the bottom of the page:

Assembly Speaker John A. Pérez and Assemblyman Rob Bonta called news of CalPERS paying salaried employees additional hourly wages "disturbing" in a joint press statement released this afternoon and promised to look further into the practice.

UPDATE 5:28 p.m.: DMV says it spoke too soon about employees with two jobs

Although CalPERS thought otherwise, a Department of Motor Vehicles spokeswoman said today that DMV doesn't give its employees dual positions in the department to ease workloads.

During interviews and email exchanges with The Bee for today's report on CalPERS salaried managers earning extra money for hourly work, a fund spokesman said officials there believed that the practice is "relatively common" among state employers.

We can never get everything we learn into a news story. "From the notebook" posts give you some of the extra details behind the news.

Our news story in today's Bee looks at CalPERS' use of "additional appointments." The practice, which allows state workers to be placed in a second state job, is authorized by Section 350 of the state Personnel Management Policy and Procedures Manual.

But the 27-year-old document doesn't directly answer the question raised by CalPERS' application of it: Does a state agency or department have the authority to give salaried managers they employ a second rank-and-file position that pays an hourly wage?

During a meeting with the Capitol press corps today, Senate President Pro Tem Darrell Steinberg said lawmakers need to look at the cost of retiree health benefits and stabilizing the state teachers' retirement system.

The Sacramento Democrat said he doesn't anticipate any moves towards a hybrid-style retirement system for the state's public employees this year.

"I think that we resolved that issue last year, I think, in the right way by requiring all employees, including current employees, to contribute more, up to 50 percent or more, of their defined benefit pension," Steinberg said. "I don't think we're going to tackle that fundamental structure again this year at least."

Columnist, CalPERS lock horns over implementing pension law

Storified by Jon Ortiz· Mon, Jan 14 2013 08:42:39

A former California state employee convicted of filing a false disability benefit claim and then lying to investigators about it was sentenced today in Sacramento Superior Court, more than three years after her arrest.

Judge Geoffrey A. Goodman handed Lisa Trevino-Angelo, now 41, three years of informal probation and a total of 40 days in jail, according to a court spokeswoman. Each of the misdemeanor convictions had carried a maximum penalty of one year in jail.

The judge recommended that Trevino-Angelo serve a medical furlough instead of incarceration. She has until Feb. 22 to apply and to qualify for the program or she must turn herself in to serve jail time.

As a personnel specialist working part time for the Department of Motor Vehicles in 2008, Trevino-Angelo applied for disability benefits. She claimed the chronic pain, anxiety and fatigue she suffered were so crippling that she was virtually homebound and hardly able to lift a coffee cup to her lips.

CalPERS, which administers state employee disability benefits, collected four hours of investigative videotape that showed Trevino-Angelo bowling in Elk Grove, lifting a toddler, jumping at a soccer game and carrying bags while shopping. She was arrested in 2009.

RELATED POSTS:
Former California DMV worker convicted of disability claim fraud
State worker's sentencing for fraud delayed until January
View Trevino-Angelo disability fraud documents

With just 400 to 450 words for our weekly State Worker column, much of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

This week's column springs from Assemblyman Roger Dickinson's hour-long visit with the Bee Capitol Bureau's reporters last week. During the discussion we asked the Sacramento Democrat what advice he would give to someone considering a career in state service.

We expected he would focus on the usual "P-words" that come up in government job discussions: "pensions" or "pay." Instead he surprised us with a different word: "privacy."

Here's a snippet of what Dickinson said:

With just 400 to 450 words for our weekly State Worker column, much of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

Today's column chips off a small piece of the tension that exists between public pension funds' obligation to transparency and their marriage with less-than-open Wall Street partners to achieve the shared mission of hitting their investment targets.

We contacted several sources as we reported the column. One was CalPERS, which sent us the following statement. Since we couldn't get it into the column, we wanted to give spokesman Joe DeAnda's comments an airing, along with more thoughts from a few other sources we interviewed on Wednesday:

The number of state workers who applied for their pensions in 2012 was essentially unchanged compared with the previous year, new data from CalPERS shows.

From mid-December 2011 to mid-December of this year, 10,596 state employees took their pensions, just 75 fewer than the number who headed for the exits the year before. CalPERS counts applications from mid-month to mid-month, so the final two weeks of December 2012 will be counted in the January 2013 tally.

With just 400 to 450 words for our weekly State Worker column, much of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

Today's State Worker column takes a look at CalPERS decision this week to add 86 new positions, mostly in its investments and information technology divisions.

Here's the Board of Administration agenda item that piqued our interest in the issue:
CalPERS Finance and Administration Agenda Item 5a

With CalPERS' window soon closing on additional retirement service credit purchases, officials during this morning's board meeting noted that it has set up two fax lines to receive applications for the benefit.

Lawmakers approved a package of public pension changes last summer that include terminating the airtime purchase program on Jan. 1.. The benefit allows pension fund members with at least five years of service to pay both their pension costs and their employers' pension costs for up to an additional five years. The credit is then factored into employees' pensions when they retire.

CalPERS expects to receive a flood of airtime cost requests over the next several days, so do yourself a favor and follow these steps if you're considering a purchase, says fund spokeswoman Amy Norris:

Make sure you meet minimum eligibility requirements. Only active CalPERS members (that means currently working for a CalPERS employer) with five years of qualifying service time with a CalPERS employer member at the time of faxing or mailing the request can apply.

Visit the Additional Retirement Service Credit website. It has instructions about the process and an online cost-estimate tool. Use the tool, because you may quickly find out that the benefit is outside your price range and save yourself and CalPERS a lot of needless work doing paperwork for a benefit you'll end up rejecting.

If you're still interested after completing the cost estimate exercise, download and complete the service credit application found on the "Service Credit Estimate Results" page. It's under the paragraph entitled "IMPORTANT".

Then, either fax or mail the request to the CalPERS office.
The phone numbers to FAX costing requests are (916) 795-1224 and (916) 795-4019.

Don't fax and mail the form -- you'll only delay processing.

All requests must arrive at CalPERS and be date stamped in its mailroom by 5 p.m. PST, December 31.

PHOTO: CalPERS headquarters in Sacramento / Sacramento Bee file

Sentencing for a former California state employee convicted of fraudulently applying for worker compensation benefits has been delayed until next month.

Lisa Trevino-Angelo was arrested in 2009 after claiming that chronic pain, anxiety and fatigue left her virtually homebound without the strength to hold her baby, drink from a coffee cup and unable to perform her duties as a personnel specialist for the DMV.

A CalPERS investigation gave a Sacramento Superior Court jury in October enough evidence to convict the 41-year-old Trevino-Angelo of submitting a false benefit claim and making false statements to support it. Each crime is punishable by up to one year in prison. Sentencing was scheduled for last week but is now rescheduled for Jan. 4.

RELATED POSTS
Former California DMV worker convicted of disability claim fraud
View Trevino-Angelo disability fraud documents

IMAGE: www.yolocourts.ca.gov

The number of California state workers who have appled for their first pension checks through the first 11 months of 2012 fell nearly 9 percent from the same period one year ago, according to new CalPERS statistics.

From January through the middle of November, 9,721 CalPERS members working for the state retired, compared to 10,671 during the same period last year. CalPERS counts initial pension applications from mid-month to mid-month, so the latest numbers include filings for the last half of October and the first half of November.

Meanwhile, the total number of state and local government retirement applications to CalPERS through November is off nearly 8 percent from 2011, despite significant monthly increases of between 24 percent and 75 percent over the last three months.

Although it looks like the 2012 will end with fewer state employees retiring than in 2011, the number of first-time pensioners since August is up 20 percent when compared with last year. If the monthly trend continues, look for a significant spike in the January retirement rolls, since more state workers retire at the end of December than at any other time.

Scroll over the the interactive chart above for state retirement comparisons. We've embedded a similar chart for all CalPERS retirements and spreadsheets with all the data after the jump.

A former state employee faces up to two years in prison after a Sacramento jury convicted her of fraud and lying to investigators to obtain a state disability pension.

Lisa Trevino-Angelo, now 41, was a personnel specialist working part time for the Department of Motor Vehicles in 2008 when she applied for the tax-free benefit. She claimed that chronic pain, anxiety and fatigue left her virtually homebound and unable to raise a coffee cup to her lips.

Officials arrested her on suspicion of fraud in 2009 after CalPERS investigators collected four hours of videotape that showed Trevino-Angelo bowling in Elk Grove, lifting a toddler, jumping at a soccer game and shopping at several stores with bags in tow.

On Wednesday a jury concluded that she had filed a false benefit claim to CalPERS and made false statements to support it. Each misdemeanor conviction carries a maximum of one year in jail. Sentencing is scheduled for Nov. 28.

"CalPERS is pleased by the verdict," said CalPERS spokeswoman Amy Norris. "We don't tolerate fraud and abuse of the system."

Trevino-Angelo's attorney, Michael Wise, could not be reached for comment.

As reported this morning by The Bee's ace business reporter, Dale Kasler, CalPERS has filed its opening rebuttal to the City of San Bernardino's municipal bankruptcy. CalPERS is the city's largest creditor with about $5.2 million in unpaid pension contributions on its books so far.

The case is significant to all government employees because it pits federal bankruptcy law's power to break contractual obligations against laws that establish the sanctity of public pension obligations.

Read Dale's report and then check out the CalPERS filing:

The number of state workers who who retired from service in October rose 16 percent from the same period in 2011, although year-to-date retirements are still slightly below last year's totals.

As the interactive chart below shows, 659 state employees applied for their state pensions last month, up from 566 one year ago. The departures contributed to the 8,830 state workers who have taken their pensions in 2012, down 2.1 percent from the first 10 months of last year.

In other words, if pension applications average 900 for the final two months of this year, 2012 will tie 2011 for the second-most number of state worker retirements on record.

Looking at the CalPERS retirements more broadly, a combined 25,712 state government, local government and schools members have taken their first pension checks from January through October, a 1 percent decline from the same period last year.

We've posted an interactive chart on the next page that captures the total membership retirement numbers.

The pension fund figures track service retirement applications submitted from mid-month to mid-month. The January numbers, for example, include employees who put in their papers in mid-December. This month's data account for retirement applications submitted from mid-September to mid-October.

The figures do not include disability retirements.

Editors note, 4:22 p.m.: This post has been updated with more data and call processing information from CalPERS.

CalPERS announced today that it has received recognitions of excellence for two of its programs, including the my|CalPERS computer system that has a history of glitches and costly overruns.

"Our teams truly embody the CalPERS core value of quality in striving to exceed our customers' needs and expectations through competence, innovation and teamwork," CalPERS' CEO Anne Stausboll said today in a press release. "These honors are well deserved."

With just 400 to 450 words for our weekly State Worker column, much of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

Our column today draws some parallels between recent changes to public employee pensions and a proposal to increase premiums by up to 85 percent for members in CalPERS long-term care program. (Unlike pensions, the fund's long-term insurance plan operates solely on members' premiums and investments. No employer money is involved.)

The fund's Pension and Health Benefits Committee will consider the plan on Tuesday. If it clears that hearing, the full Board of Administration will take it up on Wednesday.

Here's the agenda item for next week, with a summary, background and analysis of how CalPERS, like many others in the long-term care insurance industry, got to this point and how it hopes to turn things around:

CalPERS' to consider big hike for long-term care insurance

Background and social media reaction to news about the big premium hike -- up to 75 percent -- the California Public Employees' Retirement System's Board of Administration has on its agenda next week.

Storified by Jon Ortiz · Sun, Oct 07 2012 11:02:55

New CalPERS data show that the number of state workers who have entered retirement has fallen slightly from the first nine months of 2011.

The 8,171 employees who applied for their state pensions declined 3.3 percent to 8,454 during the first nine months of 2011.

With just 400 to 450 words for our weekly State Worker column, much of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

As we researched California's public pension history for our Thursday State Worker column, CalPERS' media relations office passed along a 1999 memo from then-Department of Personnel Administration Director Marty Morgenstern. The note to managers -- who would no doubt field questions from rank-and-file employees about why the state didn't just implement the increases -- explained why Morgenstern wanted to bargain them. He was particularly concerned about obligating the state pension system to life-time pension promises to employees based on fabulous-but-fickle CalPERS investment returns at the time:

You may be asked, "Why not the entire CalPERS package, isn't the Board paying for it?" The answer is no. CalPERS' earnings do help, but the State must still contribute millions of dollars each year to CalPERS to pay for our pensions. It is true that the State contribution has gone down of late. The biggest reasons ... low inflation, a good economy and the fact that CalPERS returns on investment have been greater than expected. Yet there is no guarantee that our economy will continue to grow at the same rate. More importantly, perhaps, we do not believe it is prudent to assume that CalPERS will continue to earn record-high investment returns. Like buying a home with a variable rate mortgage that has no cap, the risk would be too great.

The document embedded below includes Morgenstern's full memo and the Legislative Analyst's December 1999 take on the pension increases authorized in Senate Bill 400.

With just 400 to 450 words for our weekly State Worker column, much of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

Today's State Worker column contasts CalPERS' measured reaction to recent public pension legislation to roll back benefits (now awaiting Gov. Jerry Brown's signature) with the fund's support for retroactive pension upgrades in 1999. Here's the brochure CalPERS issued back then, explaining why retirement benefits should be enhanced and how those increases would have no meaningful fiscal impact on employer costs.

The legislation on Bown's desk rolls back benefits to pre-1999 levels for workers hired Jan. 1, 2013 and later.

With just 400 to 450 words for our weekly State Worker column, much of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

Today's State Worker column notes a marked change in CalPERS' public posture in the last year or so, a shift that we attribute to a leadership turnover, humbling scandals and investment losses that have moved its the organization to press for more transparency, tougher ethical standards and changes to how the fund manages risk.

While CalPERS doesn't hesitate to defend itself when it perceives an unwarranted attack, it also has moved to give critics a voice. Our column cites one example: CalPERS decision to invite Stanford professor Joe Nation, an ardent critic of the fund's investment assumptions, to an August forum on public pensions. Here's video of that event. Note what Nation says at the beginning of the session about CalPERS "big tent" and an earlier experience with the fund:

California state and local governments stand to save between $40 billion and $60 billion over 30 years, according to a hasty fiscal analysis of a pension reform measure set for a vote later this week, according to CalPERS.

The fund's top actuary, Alan Milligan, announced the estimate with plenty of caveats during a special meeting of the fund's Board of Administration. Lawmakers didn't issue the 38 pages of language for Assembly Bill 340 until Tuesday evening. CalPERS staff worked overnight to analyze it in time for this afternoon's special

"We've had limited time in which to review the provisions," Milligan said, "so this estimate will change as we continue to delve in to the language of the bill."

With just 400 to 450 words for our weekly State Worker column, much of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

In reporting for today's column on the coming fight pitting pension law against bankruptcy law, we spent about 20 minutes on the phone with professor Douglas Baird at the University of Chicago's Law School, discussing what lies ahead for governments, bondholders and employees. Here are a few snippets of what Baird said:

On how municipal bankruptcies challenge a lender's ability to collect:
There are strong limits on what courts can do to affect day to day operations of a municipality in bankruptcy. When talking about municipalities, what does it mean if one of them refuses to pay?

If you lend me money and I don't pay you back.... You can go to the clerk of the court, seize my assets and get proceeds from the sale of those assets.

But if it's a municipality, what exactly to you do? Sure, you can sue and the court will say the municipality owes the money, but how are you going to get the money? Buildings, for example, don't belong to municipalities. They're considered public assets. They don't belong to the city. So your asset seizure options are limited.

On how bankruptcy law might open the door to altering pension contracts:
The question that hasn't been answered yet is to what extent can you change or modify those obligations through the magic of bankruptcy? Does bankruptcy law give you the power to change those? ...

Bankruptcy doesn't give you a pass to walk away from obligations. It's simply a device that allows everyone to have a come-to-Jesus meeting and recognize reality.

Let's say you have pension obligations of 100, and assets worth just 50. You've got to do something about that. ... As a general matter, if it's a pension obligation that's vested, it's extremely hard to touch. There's a difference between someone nearing retirement and someone ... who is just starting their career. ...

Let's not forget: If you make a promise to someone you're supposed to keep it. Bankruptcy law just allows you to ask, how can we make the best of a bad situation?

With Democrats promising pension reform legislation by the end of this month, a statewide business group is pushing lawmakers to accept Gov. Jerry Brown's 12-point plan to change state and local retirement benefits.

In a letter to the governor and lawmakers on Monday, 15 members of the Regional Economic Association Leaders Coalition called the Brown plan "an important first step toward returning our pension obligations to a state of fiscal sustainability."

Many states, including California, may have more legal wiggle room to alter retirement promises for current employees than commonly thought, according to a new survey of state and local pensions by the Center for Retirement Research at Boston College.

Researchers Alicia H. Munnell and Laura Quinby conclude that "the protection accorded pension benefits is less embedded in state constitutions and more open to interpretation than commonly perceived." If state courts and legislatures narrow "the current definition of the employer-employee contract to establish that the contract is created when the employee performs the service," then it would become possible to reduce retirement benefits for current workers prospectively, the authors conclude.

Munnell and Quinby say only three states - Alaska, Illnois and New York - have constitutions that clearly protect public pensions for current workers both retrospectively and prospectively. Arizona's constitution protects pensions "past and maybe future," while those in Hawaii, Louisiana and Mississippi protect only benefits that have been accrued.

California and most states consider pensions legal contracts protected from any laws that impair them. When the contract is considered to take effect is key. Conventional wisdom says that pension contracts in California and other states take effect from the first day of employment.

Munnell said in a recent interview with Pensions & Investments that she expects more states will attempt to redefine their pension obligations once courts rule on recent laws that did so in Rhode Island and New Jersey.

For the vast majority of states, however, changing future benefits for current employees is extremely difficult ...

In the end, however, the ability to modify pensions in these states hinges on when the contract is deemed to exist. States where the contract is found to exist at the time a worker is hired have little freedom to change benefits. States where the contract is found to exist at retirement have considerably more flexibility.

Each state would have to define that for itself, the authors conclude, through both the courts and their legislatures.

Pensions & Investments reports that Munnell thinks more states will move to alter pension benefits for current workers if the courts uphold changes to current employees' pensions enacted in New Jersey and Rhode Island.
Legal Constraints on Changes in State and Local Pensions

The number of California state workers who applied for retirement in July fell 21 percent when compared with the same month one year ago, the second-largest decline in the rate of first-time pensioners in 2012.

Some 848 employees took their pensions, marking the fewest to do so in July since 2008, according to new CalPERS figures.

For the first seven months of this year, 6,460 state workers submitted their applications to retire, down from 6,975 from January through July 2011.

The dropoff last month is particularly significant because, as the chart above shows, more state workers retire in July at the state's fiscal year-end than any other month except January. CalPERS retirement application data runs mid-month to mid-month.

The decline in the retirement rate runs counter to conventional wisdom that state retirements should be on the rise as more and more baby boomers exit. Several factors contribute to the trend. Among them is the lingering impact of the furloughs of two or three days a month from 2009 to 2011, which contributed to a spike in retirements.

High unemployment in California and an agreement between Gov. Jerry Brown and SEIU Local 1000 to cut retired annuitant jobs have squeezed retiree job options and probably persuaded some employees to stick around when they might have left otherwise.

Scroll over the interactive chart above for more details. If you want to dive in more deeply, click the link below to open spreadsheets that include CalPERS retiree data for state workers and for all fund members from 2007 through last month.

This just in on our sister blog, Capitol Alert:

California's state-managed public employee retirement systems appear to have outpaced those of other states in 2011 investment earnings, according to a new Census Bureau report.

Click here for more details and a link to the federal data.

Gov. Jerry Brown has appointed Sacramento Municipal Utility District Director Bill Slaton to the California Public Employees' Retirement System's governing board, David Siders reports over at sister blog Capitol Alert.

Read more at this link.

The number of California state workers retiring for the first six months of 2012 is down from this time last year, according to CalPERS data.

Through the middle of June this year 5,612 CalPERS members had retired, compared to 5,903 during the same period last year.

In the last three months, the retirement rate has remained fairly consistent with the same period last year. The number of California state workers drawing pension checks in June was down just .86 percent from last year. In April the number was down 2.79 percent. In May it was up 5.47 percent.

This marks a large change from March, when 61.48 percent more people drew pension checks than did so in March 2011.

In January, 28.21 percent fewer people retired compared to the previous year. This marked a significant change to the total number of retirees for the year because this January only 1,970 state workers retired, opposed to 2,744 in 2011 and 2,647 in 2010. Most state workers choose to retire at the end of the year, which counts in the January retirement figures.

In February, however, 45.7 percent more retired than the previous year.

Click the tabs at the bottom of the above spreadsheet to see more charts and data about CalPERS retirement figures.

Hannah Madans contributed to this report.

California's public retirement systems' pension obligations were a combined $112 billion beyond the value of their assets in 2010, according to a report released this week, with anticipated retiree health costs adding another $77 billion in unfunded liabilities.

The study issued by the nonprofit, nonpartisan Pew Center for the States, says that the combined pension and health costs are both a cause for serious concerns.

California's total long-term retirement and health costs two years ago totaled $593.7 billion, according to data collected by Pew, but the funds paid just 75 percent of the recommended contribution into pension plans and 29 percent of what the state should have paid to fund retiree health benefits.

Experts generally agree that healthy pension funds keep their unfunded liabilities to 20 percent or less.

Nationally, states continued to lose ground in 2010 to cover the long-term costs. In fiscal 2010, states fell a combined $1.38 trillion short of having saved enough to pay their long-term retirement bills, up 9 percent from the year before.

Editor's note, 6:11 a.m., June 1, 2012: An earlier version of this post incorrectly attributed the following memo to CalPERS. The summary is from a source outside of the fund, but CalPERS confirmed its accuracy.

CalPERS has whacked the pensions for several former City of Vernon officials in the wake of the scandal there and a subsequent audit that looked at city records from 2002 to 2010.

The decisions severely cut or completely eliminate benefits for most of the named CalPERS members.

Here's a memo detailing the fund's determinations followed by letters sent to each person earlier this month explaining the penalties and the rationale:

City of Vernon Membership and Compensation

Below is the information regarding the membership and compensation determinations for the City of Vernon employees. Based on the information we received, you will find that there were service credit periods removed for most of these members. In our letters addressed to the individuals below, we stated that determinations were given as a result of conflicting and insufficient information. The individuals and/or the City may provide additional documentation to supplement the information previously submitted. Any additional information must be submitted within 30 days of the date of the letter and must be specific and clearly show evidence that the members properly held the specific positions listed and that those positions were established and meet the requirements outlined by law, resolution or ordinance.

Eric Fresch (All service removed)
· Independent Contractor for service with the City of Vernon making him ineligible for membership for service with the City from 1986-2010
· 28.746 total years of service removed - of which 16.1 years was arrears service
· 5 years of Additional Retirement Service Credit removed - Reimbursement and/or credit to be effectuated in accordance with State and Federal law.
· Safety Classification denied
· If membership is proved CalPERS cannot determine payrate due to conflicting and lack of information.
· Pay schedules provided do not meet CalPERS requirements and contract agreements conflict with pay schedules provided.

Jeffrey Harrison (All service removed)
· Independent Contractor for service with the City of Vernon making him ineligible for membership for service with the City
· 4.676 total years of service removed
· Safety Classification denied
· If membership is proven CalPERS still cannot determine payrate due to conflicting and lack of information.
· Pay schedules provided do not meet CalPERS requirements and contract agreements conflict with pay schedules provided.

Eduardo Olivo
· Independent Contractor for service with the City of Vernon making him ineligible for membership for service with the City for 1994-2002
· 15.265 total years of service removed - of which 7.770 years was arrears service
· 5 years of Additional Retirement Service Credit removed - Reimbursement and/or credit to be effectuated in accordance with State and Federal law.
· If membership is proven CalPERS still cannot determine payrate due to conflicting and lack of information.
· Pay schedules provided do not meet CalPERS requirements and contract agreements conflict with pay schedules provided.

Roirdan Burnett
· Eligible membership date was changed to February 6, 2008 from December 3, 2002
· Part of his 4.462 years of service credit is determined to be as an Independent Contractor but still determining the period - If no documentation is provided, all service will be removed
· If membership is proven CalPERS still cannot determine payrate due to conflicting and lack of information.
· Pay schedules provided do not meet CalPERS requirements and contract agreements conflict with pay schedules provided.

Bruce Malkenhorst Jr. (Membership and Comp)
· Part of his 10.647 years of service credit is determined to be as an Independent Contractor but still determining the period - If no documentation is provided, all service will be removed
· Safety Classification denied
· Pending the verification of membership, payrates have been verified from 11/97-6/05 and 10/07-last day of employment
· If membership is proven the payrate cannot be determined from 7/05-9/07
· Member has requested a refund
· Member informed, upon correction of payroll elements by the City, CalPERS will contact member regarding a refund and/or credit of normal contributions. Reimbursement and/or credit to be effectuated in accordance with State and Federal law.

Bruce Malkenhorst Sr. (Comp Issue Only)
· The pre-deprevation letter, which includes our preliminary determination to adjust his allowance downward, was returned to program from LEGO on 5/21/12 for review. The letter will be mailed Friday 5/25/12, giving them until 6/25/12 to respond.
· He held multiple positions simultaneously, which were unable to be pulled apart to determine compensation related to each position
· His payrate did not comply with the requirements of being paid "pursuant to publicly available pay schedules" under the meaning of that phrase in the statutory and regulatory definitions for payrate. In addition, the amounts failed to meet other definitional requirements of payrate in so far as they were not for the normal duties of one full-time position and were amounts reported for duties or services performed for other simultaneous positions that would constitute "overtime" under the PERL.
· In an effort to determine a reportable payrate for the member CalPERS will be using $7,875 to calculate his allowance. This amount is the payrate for the position of the acting City Clerk, which is one of the position Mr. Malkenhorst held during the tenure of his employment. The $7,875 payrate was given to Mr. Malkenhorst's successor. It was provided in a Resolution signed June 29, 2005, and effective July 1, 2005. Mr. Malkenhorst's retirement date was July 1, 2005.
· His longevity has been determined to be limited to 20%, instead of the 25% his initial allowance was calculated with. This is due to the additional 5% only being available to him.
· The final compensation amount of $44,128 originally used to calculate his retirement allowance has been reduced to $9,450. This will reduce his allowance amount from $45,073.52 to $9,654.

Mark Whitworth (Comp Issue Only)
· The City is currently reporting a payrate based on his service rendered as the Fire Chief. This compensation includes a payrate of $16,599 and 5% ($829.95) Educational Incentive for a total reported compensation amount of $17,429.01.
· Mr. Whitworth is currently working in multiple positions and the City must substantiate the full-time payrate for each position and report the payrate(s) accordingly.
The pay must be for services rendered on a full-time basis during normal working hours and cannot be for additional duties or services related to other positions

Donal O'Callaghan
· Member refunded
· Notes have been added to the system in order to insure he cannot reinstate or redeposit without being reviewed and approved by the Compensation Committee.

Here are the cover letters and determination letters that CalPERS sent to each official:

The number of state workers drawing their first pension checks in the first four months of this year is down nearly 8 percent from a year ago, according to the latest data from CalPERS.

The four-month retirement rate continues a trend set in 2011, when initial retirements for the calendar year fell 8 percent.

Last month, the number inaugural state retirees fell to 627, down 2.8 percent from April 2011.

CalPERS counts new retirement data from mid-month to mid-month. Owing to the rules that govern cost-of-living adjustments, more state workers retire at the end of the year than at any other time. Those retirements show up in the January figures.

By contrast, far fewer state workers elect to retire in February, March and April. Relatively small shifts in retirement patterns during those months can produce big swings in the year-over-year percentages.

A total 1,711 state and local government and school employees with a CalPERS pension headed for the exits in last month, up 11 percent from a year earlier. Since January, 9,776 CalPERS members have retired, down 6 percent compared with the same four-month period in 2011.

Click tabs at the bottom of the spreadsheet below to toggle between tables with retirement data for state worker and for all CalPERS members.

CalPERS announced today that it will host retirement planning events in Sacramento, Anaheim and Santa Clara this summer.

Representatives from CalPERS, the Social Security Administration, the state's Savings Plus Program, ScholarShare college savings program and several employee and retiree organizations will be on hand. The events also include workshops on health and retirement benefits, service credit, Social Security and other pertinent topics.

CalPERS members can register via "My Education" area of the my|CalPERS member website at my.calpers.ca.gov.

Here are the dates, times and locations:

Sacramento
Aug. 10 - 11
9 a.m. - 4 p.m.
Sacramento Convention Center
1400 J Street
Sacramento, CA 95817

Anaheim
Aug. 17 - 18
9 a.m. - 4 p.m.
Sheraton Park Hotel
1855 South Harbor Blvd.
Anaheim, CA 92802

Santa Clara
Aug. 30 (one day only)
9 a.m. - 4 p.m.
Santa Clara Marriott
2700 Mission College Blvd.
Santa Clara, CA 95054

PHOTO: Big Stock Photo / Sacramento Bee file

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 Pérez 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:

A new study says that CalPERS could have saved between $18 million and $54 million in 2008 health care costs if more of the fund's members warded off common diseases such as diabetes and hypertension with diet and exercise.

Talk show host and health advocate Dr. Mehmet Oz, SEIU Local 1000 President Yvonne Walker, Controller John Chiang and Treasurer Bill Lockyer will unveil the Urban Institute study and a new pilot program to promote wellness at a 1:30 p.m. press event at the California Museum.

Researchers looked at the health records of nearly 556,000 state employees and their dependents who are covered by one of nine CalPERS health plans.

Click here for a short item in today's Bee with more details about the study, which is posted below.

Potential Savings Through Prevention of Avoidable Chronic Illness Among CalPERS State Active Members

A bill scheduled for a committee hearing today would cap the compensation for two jobs at the California State Teachers' Retirement System at 150 percent of what the governor earns, but the new ceiling is twice what the positions currently earn.

Assembly Bill 1735, which is sponsored by CalSTRS, is in front of the Assembly Appropriations Committee. The measure expands the list of jobs for which the fund's board can set compensation to include chief operating officer and chief financial officer.

The fund says it needs the flexibility to compete for candidates outside of government. The bill caps what CalSTRS board could pay at one-and-a-half times the govenor's salary, currently about $174,000 per year.

"Given the new ceiling of $260,000 per annum, this bill allows CalSTRS to double existing salaries," an Appropriations staff analysis says. "The actual costs will depend on the compensation packages developed by the Teachers' Retirement Board."

CalSTRS says that paying more to get the most-skilled executives will save big bucks because it will be able to hire and hold better-qualified managers who make key business decisions.

The fund has said that it needs an infusion of money to meet its long-term pension obligations. In February, it reported assets of $152 billion, sustaining its pension fund for 856,000 public school teachers and their families in California's 1,600 school districts, county education offices and community college districts.

CalPERS new computer system is continuing to miscalculate some pension deductions, despite a modification that fund officials said had fixed the problem.

The issue came up Tuesday afternoon during a report to the fund's Pension and Health Benefits Committee by Donna Lum, Deputy Executive Officer for Customer Services and Support. Tuesday's Bee highlights some of the report, which you can read here.

CalPERS spokesman Brad Pacheco is checking on how many members are affected.

We've embedded a real-time transcript (which may not be an error-free verbatim record of the proceedings) at the end of this post and highlighted the exchange between Lum and board member J.J. Jelincic about the "unfixed" pension deduction problem:

We never get all of what we learn into a news story, but this blog can give users the data, the notes and the quotes from the notebook that informed what was published.

The CalPERS computer system story in today's Bee draws from an item on the agenda of the fund's Pension and Health Benefits Committee, which is meeting this morning.

Here's the report on the system. Click here to watch the committee session live online, starting at 9 a.m. or after the Finance and Administration Committee ends its hearing, whichever is later.
CalPERS Workload Inventory

The California State Teachers Retirement System said today that the gap between its promises to pensioners and its assets to pay them grew to $64.5 billion in fiscal 2011, up $8.5 billion from a year earlier.

The unfunded ratio grew from 29 percent to 31 percent despite the fund's investments turning a 22 percent profit for the year that ended on June 30, 2011.

CalSTRS Deputy CEO Ed Derman said during a conference call this morning that the fund would need to realize 10 percent returns for the next 30 years to climb out of the funding hole through investments alone.

Put another way, CalSTRS needs an annual infusion of money equal to about 13 percent of the annual wages earned by its 430,000 school-employee members. Actuaries said in a report due to the CalSTRS board on Thursday that losses carried over from the stock market collapse, a lowering of investment return assumptions and money allocated to a special benefits fund all contributed to the growth of the unfunded liability.

CalSTRS in February reported assets of $152 billion, sustaining its pension fund for 856,000 public school teachers and their families in California's 1,600 school districts, county offices of education and community college districts.

Over the weekend, CalPERS moved judges and legislators' retirement accounts into its glitch-plagued, $500 million-plus my|CalPERS computer system.

According to an internal e-mail that we've posted below, the shift affects about 5,000 CalPERS members, dependents and beneficiaries, a tiny fraction of the fund's 1.6 million members. It's the last -- and most powerful -- group to be switched into the new computer system.

CalPERS spokesman Brad Pacheco said that the fund years ago planned to bring judges and lawmakers into the system later than other members.

"The systems, program and benefits for these members are very different from State, School and PA members," Pacheco said in an e-mail. "These are completely separate funds, with dedicated staff. Our focus was on the integration of the 49 systems that supported the majority of our members knowing that the small, standalone legacy system that supported JRS/LRS could continue to operate."

CalPERS has a unit with "specialized knowledge in this area that members can contact if they have questions. This is not a change from the past, except now processing will be integrated into the larger my|CalPERS system," Pacheco said.

(By the way, voters ended pensions for those first elected to state offices in 1990 or after. CalPERS has statistics on judge and legislator pensions on its website. Click here and scroll down to pages 4 and 5 for more details.)

Here's the e-mail from Laura Enderton, CalPERS stakeholder relations manager:

By Dale Kasler
dkasler@sacbee.com

A New Jersey drug company agreed to pay $2.75 million to settle a state investigation stemming from its hiring of Alfred Villalobos, the figure at the center of the CalPERS bribery scandal.

Medco Health Solutions agreed to the settlement announced today by California Attorney General Kamala Harris. The company also agreed to "change internal procedures," the attorney general said.

CalPERS fired Medco last year after it was revealed that the company had paid Villalobos, a former CalPERS board member, more than $4 million to allegedly help the company secure a new drug contract with the big pension fund.

From The Bee's Dale Kasler:

CalPERS today moved toward reducing its investment forecast by a quarter percentage point, a move that would cost the state's general fund $167 million a year.

Click here to read more.

The recommendation goes to a vote of the full board on Wednesday.

Next week, CalPERS Board of Administration will consider lowering its investment return expectations from the current 7.75 percent to 7.25 percent.

If that happens, pension costs would increase for state and local governments -- and employees would have to pay significantly more for air time after Mar. 15.

CalPERS Pension and Health Benefits Committee will take up the issue on Tuesday. If it accepts Chief Actuary Alan Milligan's recommendation, "The cost for service credit purchases under the present value method is expected to increase between 5 percent and 13 percent when looking at the most common ages at which members currently buy service. Note that the actual increase for some members would be more."

CalPERS members who buy air time before the deadline will get the benefit of the higher rate of return assumption. So will members with a request for an official air time cost estimate submitted to the fund before Friday.

Members have 60 days to purchase air time after receiving a price quote from CalPERS.

"No one (with cost esitimates in the queue) needs to worry," CalPERS spokesman Brad Pacheco told us Friday afternoon. "Those (prices) will be honored."

The benefit costs thousands of dollars. If you're thinking about buying air time, we recommend you start with CalPERS' online service credit calculator before contacting the fund for an official estimate. Click here for more details about how to get a quick ballpark idea of what air time would cost you.

We've embedded the return assumption rate item below. Scroll down to "Impact on Member Calculations," for the discussion of service credit costs.

With just 400 to 450 words for our weekly State Worker column, some of what we learn each week never sees print. Column Extras give you the notes, the quotes and the observations that inform what's published.

Our State Worker column in today's Bee looks at how CalPERS is continuing to deal with nagging problems concerning its $500 million-plus computer system. This time the trouble touched about 4,200 retirees whose health insurance premiums were incorrectly withheld. Twice.

Here are some snippets of email correspondence this week between The State Worker and CalPERS spokesman Brad Pacheco that we've arranged in a Q&A format, and the text of a letter sent to affected members on Feb. 22 and Feb. 23 that explained the withholding mistakes and the fixes.

Fewer state employees took their pensions last year, reversing a four-year trend that had seen more workers going into retirement.

And if the first two months of this year are any indication, more state employees will hang on to their jobs longer this year.

According to statistics provided by CalPERS in the chart above, 10,671 state workers applied for service retirement in 2011, down nearly 8 percent from the year before.

For January and February of this year, just 2,703 state employees submitted their retirement papers, a 17 percent decline from the same period in 2011.

The data shows the number of state applications for service retirements, which CalPERS counts from mid-month to mid-month. More state workers retire during the January period, which includes applications from mid-December to the end of the month, because of the way the fund calculates when they can receive their first retiree cost-of-living adjustment.

The number of state workers entering retirement had been growing each year, fueled by the state's aging workforce demographics. No doubt that furloughs, threats of wages being withheld during budget impasses, concessionary contracts and other issues during former GOP Gov. Arnold Schwarzenegger's administration pushed some employees to retire earlier than they might have otherwise.

(Click the tabs at the bottom of the table for charts and information about combined state and local retirement applications to CalPERS.)

Since there's no clearinghouse for exit interviews and no survey of why more state workers are sticking around, it's tough to say why fewer employees retired last year. What do you think?

Controller John Chiang today urged the state to scrape up at least a little extra cash to pay down state retiree health and dental benefit costs, which his latest commissioned report pegs at $62.1 billion over 30 years.

The figure, a snapshot of the unfunded health obligations on June 30,2011, represents a 5 percent increase over $59.9 billion identified a year earlier. Actuaries with Gabriel Roeder Smith & Co. had expected an even higher number, but CalPERS' push to trim health costs through a variety of programs, fewer and less expensive claims and lower-than-anticipated use of services have trimmed expenses.

For the most part, the state is covering those costs year to year, paying retiree health bills as they come up. A more prudent course, Chiang said, is to treat the long-term benefit expenses like the state treats pensions: set aside money now, invest it and then use the returns on investments to defray future retiree medical and dental costs.

"Even slight amounts set aside will help lessen the impact on future generations, and ensure that we fulfill our responsibilities to the state workforce and our taxpayers," Chiang said in a press release.

Gov. Jerry Brown's proposal to put future state and local government employees into hybrid retirement plans won't significantly cut the state's pension costs and could cost some employers more than their current defined benefit plans, the California Public Employees' Retirement System said in an analysis released Tuesday afternoon.

"For school employers, cost savings are expected to be 2 percent of payroll, while local public agencies will vary but are expected to be greater than the State overall," CalPERS staff analysis concluded, while employers' cost for safety workers' pensions would increase.

The fund confirmed that the governor's plan would lower benefits for new workers and shift more risk from employers to employees. Brown and other pension reformers have argued that both need to happen.

The report, requested by the Conference Committee on Public Employee Pensions, didn't consider administrative costs to manage a hybrid plan or to possibly close current defined benefit plans. It used two hypothetical retiring employees to illustrate how a hybrid plan would work:

As directed by the Committee staff, the hypothetical member is someone hired at age 32 that will eventually retire at age 67 for miscellaneous members and hired at age 27 that retires at age 57 for safety members.

Brown's goal is for a hybrid system that combines retirement income streams aiming to total 75 percent of an employee's income averaged over his or her final three work years. For miscellaneous workers, Brown's proposal envisions 25 percent coming from a 401(k)-type savings account, 25 percent from a defined benefit and 25 percent from Social Security.

Safety workers who don't pay into Social Security would receive 50 percent from a defined benefit. Hybrid pensions for the California Peace Officer Fire Fighter group would cost the state 2.1 percent more, CalPERS concluded.

Some links for those who want to dive into the deep end of the public-pension debate pool:

The CalPERS hybrid cost analysis
Hybrid Actuarial Analysis 2. 2012.docx
Summary of Gov. Jerry Brown's 12-point pension reform plan
Bill language of Brown's 12-point pension reform plan

PHOTO: CalPERS headquarters. Sacramento Bee photo.

View more videos at: http://nbcbayarea.com.

Thanks to Blog User J for flagging this story for The State Worker.

Gov. Jerry Brown's plan to put future state and local government employees into hybrid pension plans and push back the full retirement age for new hires would hit low-paid workers the hardest, according to a recent academic analysis.

Researcher Nari Rhee of the pro-labor UC Berkeley Center for Labor Research and Education concludes that while Brown's suggested package of changes to public retirement systems contains "several sensible proposals," the pension design and age threshold changes "may impose a disproportionately large burden on low-wage workers."

From reporter Charles Piller's story in today's Bee:

Duane Wiles, recently fired by the California Department of Transportation for fabricating bridge tests, has been allowed to resign instead.

This marks the second time Wiles has been "unfired" by Caltrans. The first was in 1998 for incompetence, insubordination, dishonesty and other problems, but the agency was overruled by the State Personnel Board.

This week's settlement agreement with Caltrans prevents a public airing of Wiles' admitted fraud and errors, and removes a public forum for examining whether agency higher-ups responsibly addressed the problem.

Here's the stipulated settlement agreement signed by Wiles, his attorney and Caltrans representatives.
Duane Wiles Settlement Agreement with Caltrans

We can never get everything we learn into a news story. "From the notebook" posts give you some of the extra details behind the news.

Our story in today's Bee examines various factors that have contributed to a management shortage at Cal Fire, particularly the dwindling number of assistant chiefs and the revival of department pay differentials this month intended to correct the problem.

To understand the last 10 years of wage history at Cal Fire, we looked at ...

The Legislative Analyst's June 2, 2006, evaluation of the contract with Bargaining Unit 8, California Department of Forestry Firefighters.

The Sept. 18, 2001, Assembly Floor analysis of AB 649, the bill that included the 2001 Unit 8 contract. (The LAO didn't run labor contract analyses until a 2005 law required them.)

We also looked at revised Pay Differential 369, below, which lays out the details of the recruiting and retention differential revived for Cal Fire assistant chiefs and others in the same Chief Officer series. Of note: The differentials count toward pension calculations, but the "PERSability" is phased in over two years.
Cal Fire Recruitment and Retention Differentials

From The Bee's Dale Kasler:

CalPERS said today it earned a 1.11 percent investment return on 2011, a fraction of the gains from the year before.

The results were announced at a board meeting in Monterey by CalPERS' chief investment officer, Joseph Dear.

Click here to read the rest of Dale's breaking news report.

Barron's, a publication that focuses on investments, criticizes CalPERS' strategy in a recent editorial: "In 2008 and 2009, Calpers met the panic with panic. Because its newer private-equity and real-estate deals required cash infusions, the funds had severe liquidity problems. The system sold stocks as the market declined, partly to try to dodge the downturn in equities and partly to meet its obligations."

The piece rehashes some of CalPERS' best-known failings and concludes that public pension funds "aren't managed by people who have the taxpayers' interests at heart. Most managers are beholden to public- employee unions; some are themselves public employees more interested in their benefits than their costs. ... Boards have taken far more risk, tolerated lower contributions, and given more generous promises than what the residual owners of the funds--taxpayers--would have permitted."

Click here for the Barron's editorial by Thomas G. Dolan.

What do you think? Is Barron's on target?

While there's no shortage of coffee and lunch locales around the Capitol, many state buildings are home to additional dining options. This post is part of a weekly series of mini-reviews of some of those spots for downtown denizens looking to try something new.

The spot: The Plaza Café, located on the ground floor of CalPERS' Lincoln Plaza North at Q and 3rd streets, is about a half-mile walk from the Capitol. It features patio seating with a waterfall (left) and a large, multi-level indoor eating area (below at right). Come at peak breakfast or lunch hours, and be prepared to wait in line for the grill. My gastric brothers-in-arms for my recent visit, CalPERS board member J.J. Jelincic and Jim Zamora, SEIU Local 1000 spokesman, both mentioned that Plaza Café draws customers from several buildings nearby including the Board of Equalization HQ, the Crocker Art Museum and the state Department of Social Services. The business is open for breakfast (6:45 a.m. to 10: a.m.), lunch (11 a.m. to 1:30 p.m.) and snacks (1 to 3 p.m.). Street parking can be a hassle, especially during the three days in the middle of the month that the fund's board meets in an auditorium just a few steps from the cafeteria. Nearby meters charge 25 cents per 12 minutes. The parking garage across the street runs $2.50 per hour, according to CalPERS' website.

The grub: There must a reason that Plaza Café is taking business from other state cafeterias. Maybe it's the locally harvested and organic produce touted on a blackboard at the cafeteria's entrance. Could it be the $5.99 artisan sandwiches? The regularly rotated "global flavors" like the Japanese teriyaki rice bowl ($6.59)? Maybe it's the Bayou wraps with jerk chicken or pork tenderloin with mashed sweet potatoes, red beans, rice, slaw and pineapple salsa ($6.99)? Or it could be the made-to-order pasta, tacos and salads that all run between $6.59 and $6.99. And I haven't even mentioned the grill that was serving a veggie banh mi -- a Vietnamese sandwich -- plus the usual burger-and-fries fare. Safe to say that this is easily the most diverse menu offered by any state cafeteria reviewed by The Dish.

On our plates: I ordered a veggie calzone. Jim sampled the goat cheese with roasted plums and herbs on crostoni (right). J.J. went for the grilled cheese and short ribs sandwich with curly fries (left).

The bill: The food and two soft drinks (Jim didn't buy a coke) plus tax came to $22.45. Note to the Fair Political Practices Commission: J.J. paid for his meal.

The good: This isn't your dad's old state government chow line. Plaza Café's atmosphere is open and bright, and the food's degree of sophistication is surprising. I heard that the soups are terrific, especially the butternut, corn and coconut chowder. Regulars also raved about the blueberry pancakes with ricotta cheese often offered for breakfast. Our lunches received high marks, too, for the most part. J.J. said the meat in his sandwich was "awesome," tender and tasty. His fries were done to his liking, with a nice exterior crunch and a warm, chewy center. Jim said the plum crostoni had a nice blend of the sweet fruit and the garlicky cheese. My calzone was enormous, nearly covering my 9-inch paper plate.

The bad: J.J. wished the bread on his grilled sandwich had been a little crispier. Jim wanted some crunch on his crostoni, too. He suspected that even though the bread bore panini grill marks from its preparation, that it was softened by the cheese and refrigeration. My calzone was an unadventurous mountain of crust packed with ricotta, asparagus and spinach and an unsatisfying smudge of bland tomato sauce.

Grade: 4.5 sporks out of 5.

Have you been to CalPERS Plaza Café? Share your experiences in the comments field below. Share your experiences in the comments field below. And check out our recent reviews of Griselda's World Café, Gold Rush Grille, Side Bar Café, Cafe 744, Capitol Coffee and Dave's Deli (closing at the end of this month, we hear).

Putting "Stanford," "study" and "pensions" in a headline guarantees an online traffic surge. An April 2010 post, "Stanford study: Public pensions a half-trillion dollars short," ranked as the 15th most-viewed State Worker blog item among the 1,000 we posted that year.

This year's follow-up to that report by Stanford University professor Joe Nation ranked even higher -- and if the subsequent fallout from the report is an indication, rankled public-pension supporters even more.

Here's the Dec. 13 post on the latest Stanford study, "Stanford study pegs California pensions' shortfall at $500 billion."

With just 400 to 450 words for our weekly State Worker column, some of what we learn each week never sees print. Column Extras give you the notes, the quotes and the observations that inform what's published.

Our weekly column today looks at the latest developments with the new my|CalPERS computer system and how the change from the old systems has affected the fund's call center.

The report is informed by our attendance at Wednesday's Board of Administration meeting, interviews before and after, earlier reporting and a few documents:

Welcome to the fifth and final entry (for now) of "Dialing for CalPERS," the ongoing (and highly unscientific) series that spot checks how long the fund's Interactive Voice Response system says callers must wait to speak with a real person.

CalPERS said it tweaked the system this morning and indeed it did. The voice recording starts by warning that peak call hours are between 9 a.m. and 11 a.m.: "You may experience a shorter wait time by calling before or after these hours." Good move.

We headed into member services to apply for retirement, since more state workers retire in December than any other month. We asked for a representative and encountered the system's other new feature: an estimated range of time on hold. In this case, it was between 33 minutes and 45 minutes.

We also understand that the fund has made changes to allow more callers to get a call back rather than remain on hold. The fund is still adjusting that program, officials said at today's CalPERS board meeting.

Kudos to CalPERS for making changes to the system that will, hopefully, reduce stress levels for callers and call center employees alike.

IMAGE: www.photobucket.com

It's Day 4 of "Dialing for CalPERS," the ongoing and highly unscientific series that spot checks how long the fund's Interactive Voice Response system says callers must wait to speak with a real person.

Hold time for a 4:10 p.m call today to the disability benefits unit, according to the automated system: 29 minutes.

We've been talking to CalPERS about the situation. Officials there say that the IVR's estimates often overstate caller hold times. Here's an explanation and a tip on when are the best time and worst times to call in:

California Common Sense has posted an adjunct "data transparency portal" supplementing this morning's Stanford study that estimates California's three biggest pension funds are carrying up to $485 billion in unfunded liabilities.

The CCS website allows users to parse the Stanford data by pension fund and by various metrics, including the one captured below that compares unfunded liabilities to general fund spending (excluding K-12 education and Health and Human Services).

This link opens the CCS website.

This is Day 3 of "Dialing for CalPERS," a regular (and highly unscientific) feature that reports how long the fund's Interactive Voice Response system tells us we have to wait to speak to a representative when we call in.

We also received an email from CalPERS spokesman Brad Pacheco that explains how the wait estimates that callers hear on the phone are longer than hold times they actually experience.

Welcome to Day 2 of "Dialing for CalPERS," a regular (and highly unscientific) feature that reports how long the fund's Interactive Voice Response system tells us we have to wait to speak to a representative when we call in.

We called CalPERS today at 10:13 a.m. and worked our way through the automated phone system to the death benefits unit to get a claim status. Estimated hold time: 1 hour, 15 minutes.

Curious to see if the hold time was the same if we were seeking other information, we called back and navigated to retiree health benefits, specifically long-term care. The phone system suggested we check a specific website, call a different number for information or speak to a CalPERS representative. Hold time for that: 1 hour, 23 minutes.

CalPERS has said it's working on getting the telephone hold times down and has statistics that indicate that actual telephone wait times on average have been about 30 minutes. Fund spokesman Brad Pacheco is working on getting new figures, which we'll share here. Click here for more background. Next week we'll start a chart to track the results from our daily spot checks.

IMAGE: photobucket.com

CalPERS: Inside the Strategy
An interview with CalPERS Chief Investment Officer, Joe Dear, who discusses the European financial crisis and its impact on the U.S. and the retirement fund's strategy. (CNBC)

We're unveiling "Dialing for CalPERS," a regular (and highly unscientific) feature that will report how long the fund's call-routing Interactive Voice Response system tells us we have to wait to speak to a representative when we call in.

Today we navigated the system to the retiree death benefits at 10:30 a.m. The IVR voice on the other end of the line said we'd have to wait 1 hour and 33 minutes to speak to a representative.

CalPERS is continuing to experience "unusually long" wait times when members call in, the fund's recording says, a by-product of a transition to its 3-month-old, half-billion-dollar computer system. The State Worker has heard from dozens of disgruntled government employees and retirees with tales of phone waits of up to 2 hours or more when they're trying to get information or straighten out errors. (Click here for a recent report on the CalPERS computer system.)

Fund spokesman Brad Pacheco said in a Nov. 29 email that the fund has been fine-tuning the telephone system and offered these statistics:

During the 10 weeks since we launched my|CalPERS, 34 members out of the 98,000 calls answered waited more than 2 hours.

During the last 2 weeks, 3 members out of the over 17,000 calls answered waited more than 2 hours. Our average wait time for members over the past two weeks has been 27 minutes.

We'll post CalPERS' lastest numbers when they become available and we'll continue our own little spot checks. Don't be surprised if on-hold times are up, since December is a heavy month for the fund's call center because so many employees retire at the end of the year.

IMAGE: photobucket.com

With just 400 to 450 words for our weekly State Worker column, most of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

Our State Worker column this week looks at the recent hearing held by the Legislature's newly created Conference Committee on Public Employee Pensions. Here are some CalPERS references that were the source of numbers in the column.

Here's CalPERS' preliminary analysis of Brown's pension reform plan.

This link opens a fact sheet on CalPERS pension statistics and trends through fiscal 2010-11, including a table of employee pension contribution percentages.

Gov. Jerry Brown has appointed a lawyer and a former deputy state treasurer, both Democrats, to the California State Teachers' Retirement System board.

David Siders has details here at our sister blog, Capitol Alert.

We never get all of what we learn into a news story, but this blog can give users the data, the notes and the quotes from the notebook that informed what was published.

Our story today reports on CalPERS' problems with its new computer system, dubbed my/CalPERS, and its implementation, the Pension System Resumption Project. Since the system's startup in September, the fund has been slower to process death benefits claims for some members. The delayed payments have prompted some health insurance providers to take some members off their rolls for failing to pay their premiums -- which must be deducted from the death benefit payments).

CalPERS says it's giving the matter top priority and that no one is in danger of losing their medical coverage because of the computer problems.

Want to dig deeper? Here are some of the documents that informed the story:

The transcript of the CalPERS Board of Administration meeting on Oct. 19. The my/CalPERS discussion starts on page 48.

The transcript of the Nov. 16 CalPERS Board of Administration meeting. Scroll down to page 53 for my/CalPERS talk.

An Oct. 31 performance report on the transition from CalPERS' old patchwork computer system to the new one. We thought one of the metrics on page 2 was particularly interesting: "CalPERS reputation may be damaged if Judges and Legislators functionality is not properly implemented."

IMAGE: www.freeclipart.com

Watch Modesto for an indication of the public's mood about public pension "reform." Residents of the Central Valley city on Tuesday consider three ballot measures that sound a lot like retirement changes proposed by Gov. Jerry Brown and others rolled out last week by the California Pension Reform group.

Measures Q, R and S, written by city councilman and mayoral candidate Brad Hawn, are non-binding advisory measures, but they would gauge the direction that that residents in the Stanislaus County seat think their officials should take labor negotiations.

Measure Q asks whether the city should transition from traditional defined benefit pensions for employees to defined contribution plans common in the private sector. Measure R asks whether the city should jettison the single-year salary factor for pension calculations in favor of a three-year salary average. Measure S asks voters to weigh in on increasing the minimum retirement age, which for most city employees is 55. Police officers and firefighters can start drawing pensions at age 50.

Click here for the measures' ballot language. Click here for the Stanislaus County sample ballot. Analyses and statements for and against Q, R and S start on PDF page 36.

Labor has launched local ads against the measures, including the one above that criticizes pushing back the retirement age for police.

Hat tip to Blog User S for alerting us to the union ad.

Earlier this week we asked you to send in questions for State Controller John Chiang, who visited the The Bee Capitol Bureau on Wednesday.

We had a chance to ask a question submitted by retired state worker Terry Sutherland , who asked if Chiang thought term limits for elected CalPERS board members would be an effective reform.

Chiang first reflected on what legislative term limits have done to state governance, then focused on establishing them for CalPERS:

The Califonia Public Employees' Retirement System is live Tweeting its Educational Forum for employers at the Long Beach Convention Center.

CalPERS spokesman Brad Pacheco says that about 600 employer representatives attending the event, which started today and runs through Wednesday. Follow events on Twitter at #CalPERSEdf.

Speaking of CalPERS and the Internet, the fund has scheduled a Nov. 10 "Planning Your Retirement Webinar" that starts at 9 a.m. and ends a 11 a.m. Topics the online session will cover include:

Our Sunday story about the increased interest in CalPERS' additional retirement service credit and its impact on CalPERS member services unit didn't mention one way you can speed up the cost estimate process for everyone: Use one of the fund's online calculators.

The California's state and local public employee retirement systems had $470 billion in cash and investment holdings in 2009, down 27 percent from $643 billion in 2008, according to new statistics released by the U.S. Census Bureau.

Nationwide, state and local government retirement systems saw their cash and investments lose a collective $726 billion, falling to $2.5 trillion in 2009. The 23 percent drop in 2009 followed a $177 billion loss for the funds in 2008.

The data come from the Local Public Employee Retirement Systems Survey, which takes an annual snapshot of the financial activity and membership information of the nation's state and local public employee retirement systems. The figures include funds' revenues, expenditures and investment holdings nationally and broken out by state and local government categories.

A recent technology upgrade and a possible pension policy change has backed up the workload at CalPERS.

The fund went offline for a little more than two weeks last month to switch computer systems, which temporarily shut down processing retirement and reinstatement applications and processing member enrollment into health and dental plans.

That wasn't a surprise. Fund officials anticipated the Sept. 2 to Sept. 18 shutdown would impact its member services and put out the word.

At the same time, CalPERS has been hit with a flood of service credit pricing requests. Gov. Jerry Brown's anticipated plan to ax "airtime" purchases has prompted the surge in inquiries, we hear.

Fewer state workers are taking their first pension check this year than last, the latest CalPERS service retirement data show, although the number of new retirees remains well above 2009 levels.

As the graph above illustrates, 817 employees filed papers in September down nearly 15 percent from the 957 who applied in during the same month last year. The number of state workers who applied for retirement has fallen five months in a row when compared with the same period in 2010.

Some 8,454 state workers have entered retirement in 2011, off more than 11 percent from the 9,533 who retired during the first nine months of 2010.

Still, the number of employees retiring from state service is up 18 percent compared with two years ago when 7,143 state workers took their first pension checks from January to September. A total of 9,400 state workers retired in 2009.

Across all of CalPERS, 24,506 state and local employees have retired this year, down 7 percent from the first three quarters of last year.

The CalPERS data reflects the number of service retirement applications submitted from mid-month to mid-month, so the latest figures include the second half of August and the first half of September. Click here to download the data tables.

What's in a name? A state retiree organization hopes it's bigger membership.

CSEA Retirees Inc. is not only changing its name to California State Retirees, but it's redefining its mission to include state retirees from all departments and agencies, not just CSEA-represented bargaining units.

California State Retirees is launching its new branding campaign Friday at 10 a.m. with a news conference at the Robert Carlson Auditorium, 400 P St., Sacramento. Listed speakers include Assemblyman Roger Dickinson, D-Sacramento, and the organization's president, Roger Marxen.

The group now counts some 31,000 members, most of them from SEIU Local 1000, the California State University Employees Union and the Association of California State Supervisors. Officials now want to make clear that anyone who has retired from state government may become a member.

The name change was made official when the group filed legal papers with the secretary of state. Conference delegates approved the change in August.

Learn more about the organization at www.californiastateretirees.org.

By Dale Kasler
dkasler@sacbee.com

CalSTRS today suspended its home loan program, temporarily cutting off a vehicle that's funded $5.9 billion worth of mortgages since its inception in 1984.

The California State Teachers' Retirement System said potential borrowers must have their applications submitted, and their interest rates locked in, by Friday.

Spokesman Ricardo Duran said the program is being suspended because Bank of America, which runs the program, is selling the unit that operates that business. Although it's CalSTRS' money that's being loaned out, "we don't have the staffing power to run the program by ourselves," he said.

Since the program began, it has made more than 43,000 home loans.

The Fair Political Practices Commission signed off on fines for more than a dozen current and former CalPERS board members and employees today, closing the books on an investigation that started with 58 people connected to the mammoth pension fund.

The action today rubber stamped penalties already agreed to by 16 individuals who violated state law by failing to report meals, alcohol, clothing, sports and entertainment tickets and other gifts received from CalPERS investment partners since 2006.

The fines ranged from $3,600 against portfolio manager Shaun Greenwood to $200 for Sue Kane an adviser to CalPERS' board President Rob Feckner.

With just 400 to 450 words for our weekly State Worker column, most of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

Our column in today's fiber/cyber Sacramento Bee takes a longer look at the results of the recent gift-reporting investigation of CalPERS staff and administrators, both former and current. We noted that Fair Political Practices Commission investigators determined that half of the 58 individuals investigated did nothing wrong and seven received warning letters and nothing more.

Here are the names of 25 of the 29 individuals who received no punishment or warning letter from the FPPC, according to a list provided by CalPERS and researched by The Bee. The FFPC says that 29 cases were dropped because the individuals were blameless, so we're short four names. We'll amend this post when we get them.

Current staff and board members
Amit Aggarwal
Judy Alexander
Eric Baggesen
Derek Bergquist
Eric Busay
Dave Carmany
Diego Carrillo
Craig Dandurand
Joseph Dear
Jane Delfendahl
George Diehr (board)
Al Grijalva
Derek Hayamizu
Ken Huettl
J.J. Jelincic (board)
Lynn Keay
Henry Lam
Farouk Majeed
Randy Pottle
Michael Riffle
Brian Russell
Eric Schlendker
Dan Tanner

Former staff
Fred Buenrostro
Mary Cotrill

A sweeping measure that would curb pensions for current government employees, retirees and future hires has been given approval to collect signatures to qualify it for a statewide vote.

The "Pension Solvency Act" would take effect immediately upon voter approval and apply to all California public pension systems. The provisions include:

With just 400 to 450 words for our weekly State Worker column, most of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

Our column in today's Bee looks at the final chapter of the Fair Political Practices Commission's investigation into gift reporting lapses at CalPERS.

Bottom line: The investigation turned up paperwork gaps and 16 people have agreed to pay fines totaling about $20,000 for failing to disclose some freebies they received from companies doing business with CalPERS.

In an unusual move, FPPC Chief of Enforcement Gary Winuk, wrote a memo to commissioners about the investigation in advance of the Sept. 22 hearing set to consider the 16 stipulated settlements reached. He concluded that there were several factors working in CalPERS favor, including the employees' and board members' cooperation, confusion between an in-house reporting mandate and what the law requires and CalPERS' "strict no-gifts rule for staff and ethics training programs that go beyond the requirements of state law."
CalPERS investigation memo by FFPC Enforcement Chief Gary Winuk

The board of the California Public Employees' Retirement System publicly reprimanded one of its own this afternoon for failing to adhere to its standards of conduct.

A week after the State Personnel Board upheld a sexual harassment reprimand against him, John Joseph Jelincic Jr. was censured by his colleagues and stripped of some board responsibilities.

Jelincic was excused from the brief meeting called specifically to punish him. CalPERS President Rob Feckner read a letter on Jelincic's behalf that said he wouldn't make any comment due to "the current legal status" of the case.

The board then voted 8-0 to suspend Jelincic for six months from his chairmanship of the CalPERS investments policy subcommittee and his vice chairmanship of the health benefits committee. The group also curtailed his board-related travel until Mar. 1.

This afternoon's action was consistent with the punishment given to board member Priya Sara Mathur last year after she repeatedly failed to file personal and campaign financial disclosure forms required by law.

Jelincic, who is employed in CalPERS investment office, was reprimanded by CalPERS after three women in his department complained that he leered at them and spoke to them inappropriately before and after assuming his seat on the board in January 2010. Jelincic has said that some events didn't happen and that others where misinterpreted.

The board took its action against him in his capacity as a board member, not as a CalPERS employee.

A week after upholding a sexual harassment reprimand that CalPERS issued to one of its board members, the State Personnel Board has released the ruling issued by the administrative law judge who agreed with the fund's action.

Joseph John Jelincic Jr. had appealed CalPERS' action against him, which led to a July hearing and Judge Teri L. Block's subsequent decision that Jelincic's challenge was without merit. (Click here for more background on the case.)

SPB wouldn't release Block's ruling until its five-member board could take it up at its Sept. 6 meeting and then deliver it to CalPERS and Jelincic.

Reached by phone this afternoon, Jelincic said that he had reviewed the judge's ruling: "Clearly, the administrative law judge bought all the state's arguments and rejected all of mine."

CalPERS said after the SPB upheld the reprimand that it "has a zero tolerance policy for harassment of any kind. We are committed to ensuring that our employees have a work environment that is professional, safe, and free from harassment."

More than a dozen staff and board members of the California Public Employees' Retirement System face fines ranging from a few hundred dollars to $3,600 for failing to report gifts, according to an agenda posted on the Fair Political Practices Commission's website today.

The cases cover 16 individuals who failed to report gifts that included meals, bottles of wine, clothing, a kayak trip, a round of golf and Rose Bowl tickets.

The FPPC launched its investigation in May. Investigators combed through records of more than four dozen former and current board members and employees going back to 2006. The fines on the FPPC's website are stipulated agreements that the commission will consider making final at its Sept. 22 meeting.

CalPERS President Rob Feckner is named for failing to report five meals bought for him in 2007 and 2008 with a combined value of $277.39. He has agreed to pay a $400 fine.

FPPC staff suggested that Shaun Greenwood, a CalPERS portfolio manager, receive the largest fine, $3,600 for 18 counts of failure to report gifts he received between 2006 and 2009. The value of the meals, musical performances, whiskey, clothing, and other items from various financial firms: $2,700.

State law requires state government employees report gifts worth more than $50 from a single entity in a year. The law also caps the total value of gifts allowed in a year from a single source at $420. CalPERS, which has been embroiled in an influence-peddling scandal involving former executives and board members, currently forbids its employees from accepting gifts.

The Legislature last week passed Senate Bill 439, that bans employees and board members of CalPERS and its cousin fund, the California State Teachers' Retirement System, from accepting gifts totaling more than $50 per year from a single source. Gov. Jerry Brown has until Oct. 9 to sign it into law.

The CalPERS Board of Administration has announced it will publicly discipline one of its members at a special session on Wednesday afternoon.

The agenda item (embedded below) was added this afternoon. It doesn't name the board member. We have e-mailed CalPERS and left a message with its press relations department to see if we can get more details.

CalPERS' special session announcement comes just a week after at-large board member J.J. Jelincic lost his bid to overturn a reprimand he received for sexually harassing CalPERS coworkers while he was working in the fund's investments office.

Jelincic contended the complaints that led to the action against him were either founded on misunderstandings or orchestrated by a CalPERS management that was uncomfortable with his dual role as board member and employee. He appealed the reprimand to the State Personnel Board and lost.

Jelincic no longer works as a CalPERS investment officer. On July 1, the fund released him to work full time on board business. He couldn't be reached for comment this afternoon.
CalPERS notice of disciplinary action

New CalPERS data shows that state worker retirements in August dropped by more than a quarter compared to a year ago. It's the fourth month in a row that the number of state government employees drawing their first pension checks has fallen when compared with 2010.

Some 662 state workers filed their service retirement papers, down 28 percent from August 2010. For the calendar year to date, CalPERS has processed applications for 7,637 state government employees this year, 11 percent fewer than the 8,576 who retired during the first eight months of last year.

The CalPERS data track new service retirement applications from mid-month to mid-month. The January spike includes state workers who retired at the end of December, many prompted by pension cost-of-living-adjustment rules that delay a retiree's initial COLA until the first May after he or she has been retired a full calendar year. The July spike includes employees who hold off on retiring until the June 30 fiscal year-end. Click here to view the data represented in the table above.

A Republican-authored measure that changes CalPERS' reporting requirements to the Legislature is on its way to Gov. Jerry Brown's desk.

AB 1247, tweaks fund reporting requirements that were enacted as part of the 2010-11 budget package. The changes include limiting the report's scope to state employee pension plans and eliminating a requirement that the state treasurer publicly assess the reasonableness of CalPERS' contribution rate calculations.

Assemblyman Nathan Fletcher, R-San Diego, wrote the bill. It cleared the Legislature without a single dissenting vote. Fletcher is running for San Diego mayor next year.

IMAGE: Assemblyman Nathan Fletcher / www.asm.ca.gov

We've heard back from Michael Lee Madsen Sr., a political activist who has received the secretary of state's permission to collect signatures for a pension fund investment initiative.

Here's the email we sent Wednesday followed by the unedited reply we received from Madsen on Thursday. We're publishing it with Madsen's permission:

State Auditor Elaine Howle has placed funding the California State Teachers' Retirement System on a growing list of "high risk" issues facing state government. CalSTRS joins a fiscal and political gallery of tough problems that include the state's budget, managing the state's workforce and maintaining California's infrastructure.

Bee colleague Dale Kasler has more in this report. You can read the audit below. Click here to see a summary of California's high-risk issues and departments.
The California State Auditor's Updated Assessment of High‑Risk Issues the State and Select State Agencies ...

The proponent of a ballot measure requiring public pensions in California to invest most of their assets in California firms can begin collecting the signatures from 807,615 registered voters to qualify the measure for the November 2012 election.

The proposal would require the state's public sector pension systems to maintain at least 85 percent of their investments in California-based businesses. The goal is to boost economic activity in the state.

The Legislative Analyst's Office said the measure wouldn't accomplish that goal and would probably hurt funds' investment returns.

Cal Watchdog has reported that Michael Lee Madsen, Sr., who submitted the initiative, is a North Highlands activist who lists his activities as "writing scripts and petitions." We've emailed him for a response to the LAO criticisms and to find out whether he has money to collect signatures by the Jan. 12, 2012, deadline. We'll let you know if we hear back.

Here's the attorney general's title and summary of the measure:

State workers will identify with this: More and more cities, counties and school districts in California are lowering retirement benefits to new hires and offering financial incentives for long-time employees to leave, according to a report discussed during CalPERS' board meeting this morning.

Still, nearly four dozen contracts increased benefits during fiscal years 2009-10 and 2010-11, although "(m)any agencies are currently seeking advice on potential cost saving measures to help them find financial relief from the market downturn and budgetary concerns," the report to the fund's Benefits and Program Administration Committee says.

Michael Bilbrey has won a seat on the CalPERS Board of Administration by nearly 40,000 votes, according to preliminary results released late today by the pension system.

Bilbrey faced Richard Ross in a special runoff election to fill a vacancy on the 13-member board. The Secretary of State's Office must still certify the results.

A CalPERS press release said Bilbrey received 117,034 votes, 60 percent, and Ross received 78,718 votes, 40 percent.

Bilbrey takes over the at-large seat that Kurato Shimada resigned from last August. His term expires Jan. 15, 2014.

For more on the first round of voting, read an earlier post on The State Worker.

UPDATED at 2:30 p.m. to include comments from DPA

The chief executives of CalPERS and CalSTRS along with Controller John Chiang and Treasurer Bill Lockyer are asking the Brown administration to overhaul the state's travel meal reimbursement rates to help accommodate for trips to expensive locales.

In a letter sent Tuesday to Department of Personnel Administration Director Ronald Yank, four officials -- Chiang, Lockyer, Anne Stausboll of CalPERS and Jack Ehnes of CalSTRS -- requested that DPA "consider conforming" the state rates with federal rates because the pension systems have grown concerned that its employees are bearing significant out-of-pocket business costs.

The state's current reimbursement rates came into question earlier this year after Chiang sponsored legislation that would bar the pension systems' board members and officials from accepting gifts totaling more than $50 from a single contractor in one year. Chiang expressed concerns with meal tabs being "picked up by those seeking multimillion dollar deals" with the systems.

The state's meal and incidentals rates allow state workers to reclaim a maximum of up to $6 for breakfast, $11 for lunch and $18 for dinner. Though the same rates apply, rank-and-file employees technically negotiate them through union collective bargaining agreements.

Federal rates, which are set by the General Services Administration, range from $7 for breakfast to $36 for dinner, depending on the location of the meal.

"Rates are something worth looking at because while travel needs to be limited, they must be reasonably set to accommodate those doing the traveling," said Chiang spokesman Jacob Roper.

Department spokesman Lynelle Jolley said Yank is happy to meet with the officials as well as staff at the Department of Finance to discuss the proposal. She said that while Yank is sympathetic about the issue, consideration must be given to whether the state can afford rate changes at this time.

The officials wrote in their letter that the governor's travel restriction policy has "significantly reduced" their out-of-state travel spending, but they still send a limited number of staff members on frequent, long and last-minute trips.

The letter suggested that any increased costs be absorbed by existing department budgets.

"This will relieve staff of having to pay for legitimate business travel out of their own pockets," the officials wrote, "but in a manner which imposes a higher degree of fiscal discipline on the state departments and agencies which require and authorize the travel."

CalPERS board member J.J. Jelincic said that the state's rates force the pension fund's employees to either accept meals as gifts or pay hundreds of dollars out-of-pocket on some trips.

"If we ask staff to go do due diligence, we have to be willing to pay the freight," he said Wednesday. "Either they are going to pay reasonable reimbursement rates or due diligence will suffer."

Jelincic said in May that the state's rate "don't cut it in Manhattan, Boston, Chicago or San Francisco, to list just a few examples."

The personnel department's initial position, according to Jelincic, has been to support exploring changing the system for rank-and-file employees. But changing the rates for managers, who are not covered by collective bargaining, isn't supported because the department considers their regular pay to be high enough to bear the extra costs.

Letter to Ron Yank

The Fair Political Practices Commission has spared at least six current and former CalPERS officials from paying fines for failing to report gifts on official disclosure forms.

The FPPC opened an investigation earlier this year over allegations that 49 CalPERS board members and employees failed to accurately report gifts from lobbyists, contractors and other entities during the past five years. Six letters released last month are among the first results from the investigation. More findings are likely to be released over the next several weeks.

FPPC staff closes investigations by concluding there was no violation, advising an individual that he or she nearly committed a violation, issuing a warning that recognizes a violation was not worthy of a fine or asking the commission to approve a fine of up to $5,000 for each violation.

A proposed initiative that would require the state's public sector pension systems to maintain at least 85 percent of their investments in California-based businesses would weaken returns and fail to spur significant economic activity in the state, according to the Legislative Analyst's Office.

In a report released last week, Legislative Analyst Mac Taylor and state finance director Ana Matosantos wrote that the proposal "most likely" would cause investment returns to fall "because the measure would require a huge concentration of investments in one economic market--California--that is responsible for only about 3 percent of world economic output."

They added, "While this measure is intended to increase economic activity in California, it seems uncertain that it would result in such an increase over the long term."

Michael Lee Madsen, Sr. submitted the initiative at the end of June. The attorney general's office is expected to release a title and summary of the proposal, including the legislative analyst's fiscal commentary, in mid-August. Shortly after that, Madsen could begin the expensive process of collecting signatures to get his idea on the November 2012 ballot.

Madsen defines a "California-based business" as one with at least 70 percent of its workforce in California. The 85 percent investment requirement would kick in Jan. 1, 2016.

As of March 31, CalPERS invested about 9 percent of its $234 billion in assets in California-based companies. Companies elsewhere in the United States accounted for another 31 percent.

PHOTO CREDIT: CalPERS building in downtown Sacramento. (Sacramento Bee/ Jay Mather).

The number of state workers joining the CalPERS retirement roll was almost 40 percent lower in July 2011 compared to July 2010.

Nearly 1,800 workers filed for retirement last July, the largest spike in recent years in any month other than January. This year, 1,072 state employees filed for service retirement between June 16 and July 15.

CalPERS counts new retirement data from mid-month to mid-month, so many January retirees are people who retire just before the new calendar year and many July retirees are people who retire just before the new fiscal year.

Overall, the latest figures mean 6,975 former state workers have started collecting pensions through the first seven months of 2011. By this point last year, there were 7,660 new retirees on board. Across all of CalPERS, including local public sector workers, there have been more than 1,400 fewer retirements.

We reported on the June numbers yesterday. The full data table from CalPERS can be found here.

The chart below shows the overall increase in retirements among the state workforce in recent years as furloughs and other budget cutbacks merged with a large number of baby boomers beginning to hit retirement age.

About 9 percent fewer state workers applied for retirement this June than in June 2010, but the total number of new state retirees so far this year has slightly outpaced the figure from the first half of 2010.

According to CalPERS data, 810 state workers filed for retirement between May 16 and June 15, compared to 892 during the same period last year. Overall, a dozen more workers -- 5,903 -- started collecting pensions in the first half of 2011 than in 2010. The fund's new retirement numbers run from mid-month to mid-month.

State workers account for only about a third of CalPERS members, however. Across the entire system, a total of 14,420 public-sector workers filed for retirement during the first half of this year -- 185 fewer than in the first half of 2010.

The chart below shows the overall increase in retirements among the state workforce in recent years.

View the complete data table from CalPERS here.

Check back tomorrow for July numbers, which appear to be significantly down from a record high in 2010.

From The Bee's Dale Kasler :

California's two pension funds reported their biggest investment gains in years today as they continue to climb out of the hole caused by the market crash of 2008.

CalSTRS said it earned 23.1 percent, its highest in 25 years, in the fiscal year that ended June 30.

CalPERS did nearly as well, posting a 20.65 percent gain. That was its best in 14 years.

Click here for the rest of Dale's story.

IMAGE: www.freefoto.com

Michael Bilbrey and Richard H. Ross will face off at the CalPERS candidates forum scheduled for Wednesday from 6 p.m. to 8 p.m. in the CalPERS auditorium at 400 P St. in Sacramento.

PERSWatch is sponsoring the event, which will be moderated by the League of Women Voters of Sacramento County.

Bilbrey and Ross are in a runoff for one of the fund's at-large seats on the 13-member Board of Administration. Ballots went out to members on Thursday and must be postmarked or received by CalPERS no later than July 28 to be counted.

Click here for more info about the election.

IMAGE: www.freeclipart.com

A story in the New York Times quotes CalPERS board member Tony Oliveira and former fund chief actuary Ron Seeling on public employee pension enhancements approved more than a decade ago. The story also delves into the union's strategy a few years ago to bump up benefits for their members at the local level and the current debate over pension benefits.

No doubt that this story and its accompanying graphics will be grist for the pension debate mill. A few passages give a sense of the story's angle:

From today's Bee, in case you missed it:

Undaunted by allegations of fraud, CalPERS on Monday formally awarded a huge drug-benefit contract to CVS Caremark.

CalPERS chose Caremark even though the company is being sued by several former employees for allegedly defrauding the pension fund the last time it held the contract, nearly a decade ago.

Click here to check out the rest of the report by The Bee's Dale Kasler.

Fewer state workers applied for service retirement in May than a year ago, the latest CalPERS data shows, marking the third month this year that the rate has declined.

The numbers show that 822 state workers put in their paperwork between April 16 and May 15, down roughly 6 percent from the same period 2010.

So far, 5,093 state employees have entered retirement in 2011, compared to 4,999 who retired between January and May of 2010.

Although the year-over-year May and year-to-date numbers show slight change from 2010, they are still significantly higher than the same periods for 2007, 2008 and 2009, reflecting in miniature how the demographics of the aging workforce continue to impact the rate at which state workers are leaving.

For example, 3,192 state workers retired from January through May 2007 (which is as far back as the CalPERS data tracks) and just 7,778 retired that entire year.

And, as we noted in our State Worker column last week, Gov. Jerry Brown's February hiring freeze has slowed hiring significantly compared with the final months of Republican Arnold Schwarzenegger's administration.

(Of course, the state's use of retired annuitants and outside consultants isn't part of those figures. That's a topic for another day.)

Coincidentally, the rate at which all state and local CalPERS members retired increased a little over 7 percent in May to 2,007, as the data in the first table show. The state-only retirement figures are in the second table.

CalPERS' new retirement data run from mid-month to mid-month. The fund's active and inactive members include 1.1 million state, local and school employees. About a 31 percent of them are state workers. Another 500,000 or so retirees or their survivors receive a monthly allowance.
CalPERS service retirement applications January 2007 through May 2011

As we told you earlier this week, CalSTRS investment staff sent a letter to CalPERS investment staff encouraging them to hang in there amid a publicized scandal, a gifts probe and legislation that impacts the value of gifts that investment employees at either fund can accept and lengthens "revolving door" prohibitions should they leave for the private sector.

"These are difficult times," the June 1 letter says. "Defined benefit plans are under attack. Public employee pensions are in the spotlight and the financial markets are more volatile and challenging than ever before. Couple all of that with the burden of new rules and regulations, and it is apparent that it's getting harder and harder to simply do our jobs."

Here's the letter from CalSTRS to CalPERS. It was signed by nearly 70 CalSTRS investment staff. We've omitted those signatures as a security precaution:

PE Manager, a pension fund industry publication, has reported that CalSTRS investment staff has sent a "strongly worded" letter of support to their CalPERS counterparts, who have come under scrutiny by the Fair Political Practices Commission for gift reporting records discrepancies.

Many public pension investment employees have complained that they're being made scapegoats for real and imagined sins by their employers.

For instance, Controller John Chiang has proposed legislation that would cut the value of gifts that they can receive from $420 per person or business to $50. Another Chiang bill would set new limits on the funds' board members and employees after they sever ties with either organization.

There's the FPPC investigation. And there's the taint of an influence-peddling scandal that has damaged morale at CalPERS in particular.

Click here for the PE Manager piece.

The Fair Political Practices Commission and CalPERS Board of Administration President Rob Feckner have agreed that he failed to properly report two free meals that he received from fund partners, Feckner said in this Wednesday evening e-mail to The State Worker:

Just to give you the updated information I told you I would provide you. I have my final letter from the FPPC after clarifications and info sharing, the decision is that I now only have 2 infractions.

1 dinner with AEW, a partner in senior housing, in 2007
1 dinner with Goldman Sachs in 2008.

The others have been removed.

I have now signed the stipulation order and submitted payment for my $400 fine for 2 dinners in 5 years. I am putting this behind me and chalking it up to lessons learned.

The FPPC looked at Feckner's reporting records as part of a wider probe of gifts received by current and former CalPERS board members and employees. The investigation turned up 49 people with alleged violations, but it's not yet clear the degree of the infractions, since the commission hasn't released details of its investigation yet.

It's almost certain some of the allegations will dropped entirely or reduced. In Feckner's case, investigators thought he had failed to report four meals in five years. FPPC Executive Director Roman Porter declined to comment on the Feckner matter.

Michael Bilbrey and Richard Ross will face each other in a runoff for the CalPERS Board of Administration's Member-At-Large Position B seat, since they were the two top vote getters in a field of eight candidates for the position.

Bilbrey, first vice president of the California School Employees Association, received 46,032 votes -- 25.5 percent of the 180,474 ballots cast. Ross, who retired last year as a deputy director with the Gambling Control Commission, received 26,522 votes or 14,7 percent of ballots cast.

Bilbrey and Ross are vying for the seat formerly held by Kurato Shimada, who resigned last year.

CalPERS manages the retirement benefits for some 1.6 million California state, regional and local government workers, retirees and their families. The 13-member board sets the broad vision for the fund, including rates it charges employers and how it allocates some $236 billion in assets.

The fund will mail runoff ballots to members on June 30. Returned ballots must be postmarked by July 28  to be counted.

This morning The State Worker learned that PEHub blogger Jonathan Marino on Monday reported some inside details about the Fair Political Practices Commission investigation into possible gift reporting violations by CalPERS staff and board members.

You can click here to read the piece, which gives details of a meeting between fund CEO Anne Stausboll and CalPERS staff:

Last Wednesday, pension fund CEO Anne Stausboll addressed more than 200 CalPERS investment staff employees in a closed session meeting. At that meeting, between 50 and 60 staffers at varying levels of the CalPERS investment team were told they faced warnings and possible fines of $200 to more than $20,000, two sources with knowledge of the meeting said.

We asked CalPERS spokesman Brad Pacheco about the report. He disputed two points in the piece that came from unnamed sources:

- Anne didn't meet with 200 people. It was less than 100.

- It's not "nearly everyone who does investments." We have 230 investment staff, more than 100 of those are credentialed investment professionals. The FPPC listed 49, some of which were Board members.

The state Fair Political Practices Commission is investigating more than four dozen CalPERS board members and employees over allegations that they failed to accurately report gifts.

The 49 names on a list obtained by The Bee from the FPPC include CalPERS Board Chairman Rob Feckner and board members George Diehr and J.J. Jelincic. Chief Investment Officer Joe Dear is named, as is former CEO Fred Buenrostro. Buenrostro has been named separately in an ongoing investigation of influence peddling at the fund that is unconnected to the FPPC matter.

FPPC Executive Director Roman Porter confirmed that the commission is investigating and the employees and board members involved. CalPERS has cooperated fully and without subpeona, he said. In keeping with the commission's policy, Porter provided no other information.

CalPERS CEO Anne Stausboll said in a statement that, "CalPERS has been fully cooperating with the FPPC on this investigation over the last several months. These matters are still pending and our staff involved have due process rights."

Here's the full list of those named in the investigation:

The California Public Employees' Retirement System has launched an online form to request public records from the fund.

We wondered if the new feature was a response to a boost in info requests to the fund or in anticipation of a coming tide of inquiries as the public pension debate heats up.

Nope. "It's just an attempt for increased efficiency and make (the information) more readily available, said CalPERS spokesman Wayne Davis.

The fund also publishes travel expense reports of board members and key staff on its website. Click here to see the Form 700 statements of economic interest that board members and their designees file.

CalPERS board member Henry Jones will continue as the fund's retiree representative now that the May 13 deadline for nominations to the seat he occupies passed and no one has challenged him. The board declared Jones the unofficial winner on Wednesday. His next term runs from January 16, 2012, through January 15, 2016.

Retirees elected Jones to CalPERS' Board of Administration in 2007, nine years after he retired from the Los Angeles Unified School District as its chief financial officer. He holds a bachelor's degree in business administration and finance from CSU Los Angeles.

PHOTO: Henry Jones / courtesy CalPERS

The Bee's Dale Kasler is reporting that CalPERS has announced the state's annual payment to the fund will fall by about $170 million next year. The big reason: higher out-of-pocket payments by employees into the fund required by bargained labor agreements.

Click here for Dale's story.

CalPERS says a report issued last week that questions the sustainability of defined-benefit public pensions is "flawed" and that various fixes it considers are either inequitable or illegal.

The fund is firing back at "Comparing Public and Private Employee Compensation and Retirement Benefits in California," commissioned by the California Foundation for Fiscal Responsibility, a pension-change advocacy organization based in Citrus Heights.

The study by Capitol Matrix Consulting, a firm co-founded by former state Finance Department Director Mike Genest, says that California's state and local government employees' pay is roughly equal to counterparts' salaries in the private sector, but pension and health benefits push public workers' total compensation costs about 10 percent higher.

It considers several options proposed by the foundation to close that gap, such as eliminating health benefits for spouses and dependents of retirees when a retiree turns 65 .

CalPERS says the report makes flawed assumptions, uses flawed methods, lacks specifics and takes a race-to-the-bottom, anti-pension posture. The fund's reply is embedded below and was just posted on the CalPERS Responds website.
CalPERS' Key Observations of CFFR Study

CalPERS will begin metal detection and x-ray screening of visitors and their personal items during next week's three-day board meeting at the fund's Sacramento headquarters, according to an emailed memo issued Monday:

Increasing security measures during Board meetings is an important part of enhancing security at Lincoln Plaza. Visitor screening is a standard practice at other public meetings such as the Sacramento City Council, San Francisco Board of Supervisors and Los Angeles City Council and implementing these new security measures for Board meetings is also consistent with the recommendations made by our security consultant.

CalPERS also is contracting with the California Highway Patrol for board meeting security.

The memo, which you can read here, notes that the fund has been giving more attention to facility security for the last year. Fund spokesman Brad Pacheco told The State Worker that the new measures will cost about $150,000 per year, plus a bit more to install cameras in the auditorium where the board holds meetings.

"It's important in today's environment that we take these extra precautionary steps to protect our employees and visitors to our meetings," Pacheco said.

PHOTO: CalPERS Sacramento headquarters. File photo / Sacramento Bee

State Controller John Chiang's office contacted The State Worker on Monday with a rebuttal to a statement we published last week by CalPERS board member J.J. Jelincic stating his opposition to Senate Bill 439, which would lower limits on gifts to CalPERS and CalSTRS board members and employees to $50.

Jelincic had prepared the remarks but didn't get to read them at last week's Senate Committee on Elections and Constitutional Ethics hearing. He believes that the measure would force employees to pay for business meals out of pocket, since state per diem isn't enough to cover those expenses and CalPERS' partners or potential partners wouldn't be allowed to pick up the tab.

The measure was put on the committee's consent calendar and moved to the Senate Appropriations Committee on a 5-0 vote without testimony for or against it.

Appropriations is supposed to take up the measure on Monday.

Chiang, who sponsored the legislation, is an ex-officio member of both the CalPERS and CalST