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Pension tension: S.F. spikes retirement pay 

Wednesday, Nov 25 2009

In July, the city's Civil Grand Jury released a report condemning what it described as the "institutionalized and ongoing" practice of pension spiking among San Francisco's public safety personnel. Pension spikes happen when employees receive promotions a year or two before retirement to increase their salaries, thus making their retirement benefits higher. The report suggested that the practice was so rampant in the fire and police departments over the past decade that it will cost the city's retirement system at least $132 million to cover the inflated pensions.

So how are our elected officials responding to this $132 million problem? Apparently, by doing nothing. What looks like pension abuse to some seems to be business as usual in San Francisco.

At a recent Government Audit and Oversight Committee meeting, Supervisors Ross Mirkarimi and Sophie Maxwell seemed less concerned about abuse of the system than about the terminology in the report. Both expressed discomfort with the terms "pension spike" and "institutionalized" (although Mirkarimi implied that he was okay with "normal course of action"). "There's a possibility that some pension spiking could have happened," Maxwell conceded. "But as far as being institutionalized, I'm not comfortable with thinking that."

The two then declared the point moot anyhow, since the retirement pay boost is in accordance with the city's charter and various negotiations between unions and city officials.

As proof of the pension-spiking epidemic, the grand jury report noted that roughly a quarter of all fire and police retirees received an increase in yearly salary of 10 percent or more — a benchmark set by the San Francisco Employees' Retirement System (SFers) to indicate something suspicious — in their last three years of work. It's not surprising, then, that more than half of the firefighters and police officers who have retired since 1998 receive pension checks for more than their highest paychecks.

Which is why one flustered member of the Civil Grand Jury, Alex Gersznowicz, responded thusly to the supervisors' squeamish reaction to the mere idea that pension spiking would be occurring on the city's watch: "In essence, what you said, Supervisor, is that this is not spiking," he said. "It is spiking. I don't think we in the Grand Jury actually care what you call it."

Mirkarimi and Maxwell ended up passing a resolution out of committee prohibiting pension spiking but then left out the part where they defined the term, making their recommendation as empty as the city's coffers.

About The Author

Anna McCarthy


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