September 16, 2014

Buried in the misleading editorial, "Needed: Honest partners in pension reform," by the U-T San Diego Editorial Board, is the fact that the State Controller's Office (SCO) "did not identify pension spiking" among the dozen public agencies included in the review of the California Public Employees' Retirement System (CalPERS).

The review recommended no material changes to the Pension Fund's efforts to audit agencies for pension spiking and acknowledged CalPERS had effective processes in place to recoup overpayments.

CalPERS Board and staff take seriously their accountability to monitor compliance of contracting agencies and as such have significantly increased audit staff, doubled the number of audits of contracting agencies, and provided comprehensive education for employers by offering more than 600 training courses last year.

In addition, CalPERS has procedures in place to review compensation of active employees for pay increases and inappropriate reporting by employers, and specifically targets public agencies that have highly paid employees with reported earnings exceeding $245,000 annually in an effort to optimize its review of agencies.

CalPERS is also developing an innovative business intelligence program that will utilize technology and data analytics to identify membership and payroll reporting anomalies across its membership. This will allow the Pension Fund to focus its auditing efforts on contracting agencies most at risk for reporting errors.

And for the record, CalPERS didn't add 99 types of pay that could be counted toward a pension. They have been used by employers since 1993 and were not excluded under the Governor's pension reform law. The Governor sent CalPERS a letter saying that our proposed regulations "are largely consistent" with the purposes of the Pension Reform Act.

There is not another agency that is more transparent than CalPERS, as it conducts its business in an open and public forum, in house, and through live webcasts of proceedings. Board decisions are made with care and consideration of how they will impact all members and the communities that depend on them for vital services. Now that's a fact worth reporting.

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