A story published Sunday in the San Jose Mercury News was allegedly inaccurate when it reported the City of Gilroy picks up the tab for 16 of the pension contributions employees are supposed to foot, according to City Human Resources Director LeeAnn McPhillips.
Demanding that public employees pay into a portion (about 8 to 10 percent) of their state pension is one aspect of California’s recent attempt at pension reform, forcing public employees to share the burden for their retirements. Gilroy was one of 68 cities in the region that offered a pickup to at least some employees last year, the Mercury News reported.
There is no law to stop local governments from picking up the cost, however, and the Mercury News reported that 63,000 Bay Area workers indulge in this “little known perk” referred to as pension pickup – approximately 16 from Gilroy including management employees and City Council members, according to the Mercury News.
But McPhillips insists that’s not the case.
While the City does pay 100 percent of five council members’ pension contributions – a perk that costs taxpayers $3,480 annually – it does not participate in pension pickup for any other employees, McPhillips maintains.
“The City does pay for pension contributions of some management positions, but we deduct it from their paychecks,” she explained. “It’s just a different way to get to the same end game.”
Sunday’s Mercury News story, titled “’Pension pickup’: Bay Area taxpayers foot the bill for little-known perk” by Thomas Peele and Daniel Willis, specifically highlighted Gilroy Police Chief Denise Turner, among several others, for being one of 29 people in the region who received a pickup of more than $20,000 from the City last year.
“In fairness to Chief Turner, she gets a salary cut for the exact amount for her contribution,” McPhillips said.
McPhillips said she tried to explain the facts over the phone to Peele.
“Despite me telling him all this, he still chose to not accurately communicate Gilroy’s information,” she said.
The Dispatch contacted Peele by phone regarding the alleged inaccuracies Tuesday afternoon.
“I have nothing to say to you,” he said, before hanging up.
Per an agreement inked this month with the Gilroy Management Association, the City is doing away with the complicated process of footing pension contributions and then cutting the difference from employees’ paychecks. Starting in July, employees will simply pay into the California Public Employees Retirement System, or CalPERS, on their own.
The City will continue to pay $58 per month to CalPERS – 8 percent of a council member’s salary – for each of the five council members who have chosen to receive the benefit.
Councilman Peter Leroe-Munoz opted out of receiving any salary or benefits from the City. Mayor Don Gage receives a salary of $1,094 per month but is unable to contribute to his pension in his current role because of his prior terms as Gilroy’s mayor, McPhillips said.
As new council members are elected, however, they will have to pay for their own because of new state laws attempting to relieve the government from the burden of public employee pensions.
“For our Council members that already have it, you don’t have to change it. When new ones come on board, all that will change. That’s a product of pension reform,” McPhillips said.
City Administrator Tom Haglund said he is thinking about how he might approach the Mercury News about what he says are inaccuracies in Sunday’s story.
“Mr. Peele isn’t always amenable to conversation like that. He was actually kind of difficult for LeeAnn to communicate with because even though she explained the information to him, he did not want to hear it that way,” Haglund said. “It’s frustrating to see it written in a way that misleads the reader.”
