City Talking to State on Pension Spiking
City officials are in Sacramento today to meet with state Public Employees’ Retirement System officials to discuss the city’s tab for pension-spiking costs.
City Administrator Michael T. Uberuaga, Councilman Dave Sullivan and attorney Peter J. Brown, hired by the council to represent the city on the spiking issue, will be involved in the meeting.
“We’re trying to find out all our options before deciding how to proceed further,” Sullivan said.
A council majority contends that the practice of some city employees inflating their pensions to increase their retirement pay is illegal and that the city should not be obligated to pay an estimated $13-million for pension spiking.
Spiking is the term given when employees artificially inflate their retirement pay by taking unused vacation days, car allowances and city retirement contributions as if they were part of the final year’s salary, on which a pension is based.
In June, the council decided to challenge PERS on the legality of spiking and voted not to pay a pension-spiking bill.
PERS informed the city July 22 that it is obligated to pay for pension-spiking costs, and that it will increase the city’s contribution rate to cover the unfunded liability.