Delay Sought on Back Benefits for County Retirees

The county counsel’s office said Wednesday it has sought a court order to block the Orange County Retirement Board from paying as much as $20 million in retroactive pension benefits to county retirees.

The county contends that the board has not properly considered its action and that payments for three years’ worth of back pension benefits might be illegal and could cause problems down the road.

The action, quietly filed in a pending Orange County Superior Court case last week, raised the ire of some of the 6,800 retirees who learned about it. They had expected to start receiving retroactive benefits along with higher current benefits on July 1.

“I’m very disappointed and angered that they waited until the last minute,” said Bill Kirkwood, president of the Retired Employees Assn. of Orange County. “If they had a problem with it, they should have said something in March when we had the [retirement] hearings.”

But county supervisors had said three months ago that they thought the Retirement Board’s decision in February to make retroactive payments was too generous.

The county is one of 20 that had been ordered by the state Supreme Court last fall to increase benefits to retirees, but it is the only one to offer payments for past years, county officials said.

The high court had found that Orange, Los Angeles and 18 other counties in the state owed their employees pensions based not only on salaries but also on such perks as bonuses and car allowances. The 20 counties previously had based pension contributions on salaries only.

Officials at the Orange County Retirement Board were not available for comment. The board’s lawyer, Harvey Leiderman, said he could not comment because of the pending lawsuit between the board and the county.

Based on the board’s February decision, a retiree could receive an additional $60 to $500 each month in retroactive payments, depending on their years of employment.

However, county officials say the Retirement Board has not set a specific amount and has not explained its method of calculation. If a mistake occurs in calculating the amount of money retirees receive, they said, it could be “extremely difficult to recoup the overpayments from the retirees and could cause hardship on them” later on.

“The court should have an opportunity to make a determination as to whether or not they are unlawful [payments],” said Thomas C. Agin, assistant county counsel. “Rather than making the payments and having to get them back, . . . there is no reason why people can’t wait a month or so to have this matter resolved.”

A Superior Court hearing is scheduled for 1:30 p.m. June 9.

Supervisor William G. Steiner said the court needs to decide how much money--if any--the county must pay.

“There cannot be a give-away program until the legalities have been resolved,” he said. “It’s a cautious approach but it does not mean that there will not be retroactive payments.”

The county budget set aside $7 million this year to pay for benefits required by the Supreme Court decision, but county officials hope less money will be allocated.

The high court’s ruling came in a Ventura County case that reversed a 15-year-old decision, which had based pensions on workers’ salaries without including most fringe benefits.

County officials say that for those already retired, a 1983 state Court of Appeal ruling applies. That decision did not take into account cash benefits for retirement payments. In addition, county officials said, retired county workers did not make payments into the pension fund that current workers are making.

Los Angeles’ retirement board, which has the biggest county employee retirement system in the state, voted in February to pay the additional benefits to current workers but not to retirees. The sheriff’s deputies union has threatened to sue. Retirees of Sacramento, Contra Costa and Marin counties have filed suits challenging decisions similar to the one in Los Angeles.

Most of the state’s 38 other counties are part of the California Public Employees Retirement System, which has included perks as part of salaries in making pension contributions.