Grand Jury Enters Fray on Pensions : Benefits: Panel urges Board of Supervisors to rescind hikes that will cost taxpayers $265 million. County attorneys say such action would be illegal.

The county Grand Jury has urged the Board of Supervisors to set “an example of responsible government” and rescind controversial pension rules that have cost taxpayers $265 million.

“In view of the financial crisis now facing the county, we urge that you reconsider the recent pension increases enacted by the board,” grand jury Foreman George S. Ackerman wrote to supervisors late last month in a letter obtained by The Times Tuesday.

“We recommended that you take whatever steps necessary to accomplish this, thereby setting an example of responsible government which we expect from your leadership,” Ackerman wrote.

Ackerman, who refused to comment on the letter, said little in the three sentences he wrote to the supervisors about the grand jury’s interest in the controversy over the costly pension rules.

“As watchdog of the county government, the 1991-1992 Los Angeles County Grand Jury feels compelled to comment on the recent pension increases voted by the Board of Supervisors,” Ackerman wrote.

The grand jury’s voice joins a growing chorus of protest.

Gov. Pete Wilson recently signed legislation intended to strip away the legal justification used by the county for its quiet adoption of the rules.

Two powerful taxpayer groups last month sued the county seeking to repeal the pension rules that they allege were adopted surreptitiously and in violation of state law.

Despite the protests, the Board of Supervisors has three times voted down an effort by Supervisor Gloria Molina to repeal the pension rules. County attorneys contend it is illegal to take away pension benefits retroactively.

The rules were adopted last year at the behest of County Chief Administrative Officer Richard B. Dixon and County Counsel DeWitt Clinton. They allow benefits such as car and medical allowances to be counted with salaries in calculating retirement pay.

The rules would boost the retirement pay of some officials by 19% to more than $125,000 a year. Though some changes will benefit most of the county’s 85,000 employees, the Board of Supervisors and top county managers will derive the largest gains in retirement income.

The rules were adopted without a public vote of the Board of Supervisors or any study of their financial impact. Late last month, in a study commissioned by the semi-autonomous county Board of Investments, the cost was revealed to be $265 million.