City of San Diego Retired Employees Association
May 14, 2024
Board Meeting Minutes
NOTES: All votes were unanimous unless otherwise noted
Call to Order: The meeting was called to order by President Mike Bresnahan at 9:30am.
Board Members Present: Clay Bingham, Mike Bresnahan, Chris Brewster, Liza Crisafi, Shirley Hall, Joan Hernandez, Brad Jacobsen, and Greg Woods.
Guests Present: Joe Flynn
AGENDA: There were no additions to the agenda.
MINUTES: The minutes of the April 2024 Board meeting were approved.
TREASURER’S REPORT: Liza reported that March was a quiet month. In June the second $500 deposit for the Holiday Party will be paid to the Bali Hai.
M/S/C to approve the April Treasurer’s Report.
INVESTMENT COMMITTEE REPORT: Liza reported that the Fund is now officially over $400K and our rates of return are very good.
RETIREMENT BOARD REPRESENTATIVE’S REPORT: See attached report.
COMMUNICATIONS AND INFORMATION ITEMS:
1) Mike reported that the RFP for retiree healthcare processing was approved by the Council on April 29 and is on the consent agenda for a second reading today. All healthcare plans have been extended for one year to allow for the transition. Mike suggested that a new group similar to RITF be formed, but substituting Risk Management for SDCERS.
2) Joan Hernandez reported that our last Food Drive raised over $5900. It was decided to set $6000 as our target for the upcoming drive from June 1 to July 15.
ACTION ITEMS: None
OTHER COMMITTEE REPORTS
Membership: No report.
Newsletter: Deadline for the next issue is May 20 at 8:00am. Material should be sent directly to Connor Sorensen and Mary Ann Stepnowsky.
OTHER RETIREE/ACTIVE EMPLOYEE ASSOCIATION REPORTS
Retiree Issues Task Force (RITF): No report.
Retirement Security Roundtable: No report.
MEA: No report.
Other Retired Public Employee Associations: No report.
PROGRAMS: Clay reported that all the 2024 programs have been booked and he’s working on 2025.
ADJOURNMENT
The meeting was adjourned at 10:25am.
Respectfully submitted,
Brad Jacobsen
Secretary
REA Board Briefing – Chris Brewster – May 14, 2024
Disability Retirement: On May 9, 2024, I made a presentation to the SDCERS Disability Committee to address disconnects between the City’s workers compensation and reasonable accommodations process, and SDCERS independent medical evaluation process. This process can, in some cases, create situations in which a person whom the City will no longer accommodate due to a work-related injury is denied a disability retirement by SDCERS. In my view, this should not happen.
My presentation was unusual in that it came from a member of the SDCERS Board, but I believe it was helpful for the committee to better understand the problem and possible resolutions. I undertook thorough research including reading an extensive amount of case law, reviewing the San Diego Municipal Code and City Charter, meeting with San Diego County’s retirement system, making a presentation to SDCERS staff, consulting with two legal advisors to the SDCERS system, and putting in many hours evaluating our options.
If you would like to review my presentation you can find a copy here: Proposals_Disability_Retirement_202406.pptx.pdf
The proposal was twofold. First, to eliminate the discretion of the SDCERS Medical Review Officer and SDCERS’ attorney to require the applicant to submit to one or more independent medical examination(s) in cases that the City of San Diego has determined that an employee is permanently incapacitated as the result of injury or disease arising out of or in the course of City employment and no permanent accommodations are available.
The second was to establish a policy that in these cases the Disability Committee and Board shall approve the application, request further evaluation (including medical), or send to adjudication. This part was intended to maintain the independence of SDCERS decision-making, but to push it to the Board level.
The practical effect of this, if approved, would be that in cases the City will not accommodate a job-related injury long-term, there will typically be no independent medical exam (unless the Disability Committee deems one necessary) and, I suspect, the application will normally be approved based primarily on the City’s unwillingness to accommodate the disability.
As I’ve mentioned previously, my interest in this issue arises from some cases that have come to the Disability Committee that created concerns for me and, I believe, other members. Those cases included the case of a police detective whose disability retirement application was challenged at adjudication based, in part, on an SDCERS staff argument that she could perform her normal, somewhat sedentary work as a detective, with her work-related disability, despite the fact that the Police Department, by policy, will not accommodate any officer long-term unless they can perform the full duties of a police officer. Had the SDCERS staff argument prevailed, she would have been without a job and without a disability pension, despite what were determined to be work-related injuries.
The adjudication judge ruled, in that case, that the detective met her burden to show that her incapacity rendered necessary her service retirement, followed by her industrial disability retirement application, because her medical evidence showed she could never again meet the physical job requirements demanded by the SDPD of a police/patrol officer, and no permanent light duty or sedentary position was available to her within the SDPD.
A second case involved a police officer with a bilateral hip replacement, which was determined to be work-related. In that case, SDCERS elected to perform an independent medical examination and I wondered here why we would wish to do that if the record was clear about the bilateral hip replacement. I don’t think anyone on the Board would believe that a person with a bilateral hip replacement could work as a police officer, so the need for this second medical exam seemed curious to me.
The discussion on this topic at the committee was extensive and included some extensive legal opinions from the SDCERS General Counsel. While my proposal failed on a 2-2 vote, there was a clear agreement that those injured in the line of duty should not be denied a disability retirement.
The General Counsel argued that the best way to accomplish this would be to propose a modification to the San Diego Municipal Code. It was agreed that a proposal to this effect will be developed for review/approval of the Disability Committee and the SDCERS Board as a proposal from the Board to the Mayor and City Council.
I am confident that the Board will eventually approve such a communication and optimistic that the City Council will ultimately approve it. Time will tell.
In the meantime, I believe that raising this issue to the Disability Committee, Business and Governance Committee, and SDCERS staff makes it quite a bit less likely that these situations will arise in the future, as all seem to agree it is something to be avoided.
Additional Contributions: The San Diego Municipal Code states that a member may elect to make post-tax “Additional Contributions” at rates in excess of his or her “Normal Contributions,” for the purpose of providing additional benefits. The exercise of this privilege by a does not obligate the City to make any additional contributions. Per the SDMC, upon application, the SDCERS Board will furnish to the member information concerning the nature and amount of additional benefits to be obtained by the Additional Contributions.
I learned about the two pertinent codes outlining the above in my initial self-education as a Board member.
I also learned that an SDCERS policy states as follows: “San Diego Municipal Code sections 24.0205 and 24.0305 allow additional contributions. However, the Internal Revenue Code prohibits additional Member contributions. Accordingly, SDCERS will not allow Members to contribute additional contributions under these statutes.
I have asked if this IRS code continues to prohibit such a system and it appears that may no longer be the case. I have therefore asked and been assured that this matter is being reviewed, potentially to the benefit of active members who may wish to make additional contributions to enhance their retirement.
Proposition B Unwind: SDCERS staff reports that this process continues. Phose 1 is complete. The Phase 2 group is composed of employees who have unique situations not addressed in the Municipal Code updates, employees who have periods of City time not eligible for membership and employees who have not returned to active status with the City but have pensionable time. There are still around 100 members in the Phase 2 group which require individual analysis and attention.
The Phase 3 group are former employees who worked for the City during the time the plan was closed and terminated prior to being offered the option to purchase their Prop B time. In January, the City sent letters to approximately 2,000 Phase 3 employees with information on options to purchase their City time. A total of 236 employees opted to join SDCERS (the remainder will retain their 401(k) style benefits.
Of this group, SDCDRS has received funds for 138 members directly from the City’s savings plan trust administrator. As of a couple of weeks ago the remaining 98 members have an out-of-pocket cost associated with their purchase of City service. For that group, they have until May 14, 2024 to complete the purchase of their Prop B time.
Cynthia Queen Replacement: The process of filling this position continues and includes listing the job vacancy within the City system. Victoria Fedalizo is acting as Interim Member Services Director.
Retiree Health: As you know, the City is working on the outsourcing of retiree health processing. This was approved by Council and is on the agenda for a second reading May 14, which would be final approval.
SDCERS staff has met with the contractor for their first transition meeting and found the team “quite impressive.” Sounds promising.
The City has also issued an RFP for the City’s healthcare providers, which were on a one year extension and due to expire December 31, but decided to extend the current healthcare provider contracts for an additional year. That’s a big deal that should make it much easier for the new contractor to get up and running, with a retiree healthcare booklet issued on time. Fingers crossed.
SDCERS continues to pay the invoice associated with CareCounsel, the City’s retiree healthcare advisory service. The total value of the contract averages just over $100,000 per year. It is reimbursed by the City. It is believed that at some point the retiree health processing company may take over this work, but for the time being CareCounsel remains.