CalPERS audit finds history of pension spiking in Broadmoor police department
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Commentary

CalPERS audit finds history of pension spiking in Broadmoor police department

Three former police chiefs and a former commander received improper benefits dating back to 2011.

The small, unincorporated town of Broadmoor, California has allegedly become a destination for senior police officials to commit pension spiking. According to the results of a newly released audit from the California Public Employee Retirement System (CalPERS), three Broadmoor police chiefs and one retired commander were considered “unlawfully employed” and therefore received improper payments from the pension fund. These extra payments were never accounted for through contributions or investment earnings, meaning they added unfunded liabilities to the employers’ books. When debt like this is added to a balance sheet, cities and towns have two options – increase tax revenues or cut services.

The scope of CalPERS findings was broad. Three of the four employees were found to have received a full-time salary as an active employee, while also receiving their full retirement benefits. While some states have rules allowing “independent contractors” to temporarily work in a position that would otherwise be filled with a member in the retirement system, the duties and hours the Broadmoor members worked fell far outside the scope of that description. Two of the four employees also received random, large, lump-sum payments while they were employees of the Broadmoor Police Department.

One of the police chiefs – who retired from Broadmoor in 2007 only to be reinstated for one year in 2012 while he was double-dipping (collection a pension and full-time paycheck from a CalPERS-covered position) – saw his annual pension grow from $93,000 per year to $152,000 per year based on his higher salary in 2012 and incorrect salary reporting from Broadmoor P.D. for almost the entire 10-year audit period. That extra $60,000 annual pension benefit was never prefunded through employee or employer contributions to the pension system, pushing that employer’s benefit obligations further and further into the red.

Another one of the chiefs applied for a duty disability in 2009, which was accepted by CalPERS. To receive a duty disability benefit from a pension system, generally, the employee must show that they are incapacitated from continuing to work in that position. This employee, however, continued to work as a full-time police chief for another three years.

Issues surrounding the Broadmoor P.D. have begun to surface the past 8 months through reporting from a local media outlet. These reports, according to a new media release from Broadmoor P.D. “initiated an internal investigation into misconduct by former top employees who allegedly abused their positions to pay themselves bonuses and inflated hourly rates while defrauding the public employees retirement system.” Those internal investigation findings were passed to CalPERS, who performed a further investigation and audit, who then notified outside law enforcement agencies. According to the San Mateo District Attorney, their office continues to work on the case through their public corruption prosecutor. The Broadmoor Police Commission had a special meeting on 12/14/21, beginning with public comments before going into closed session to discuss this issue with legal counsel. Representatives from CalPERS have recently stated that they plan to “seek appropriate remedies, including restitution.”

Taxpayers, who have no choice but to put their trust in their elected officials, don’t deserve to have their own senior police officials commit crimes against them. That’s especially true as CalPERS continues to build in more realistic assumptions to the pension plan, adding more costs to taxpayers to help fund these pension benefits.

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