Office of the Controller Status of the Recommendations 2011 Department Responses by the Civil Grand Jury

Additional Recommendations 11

These recommendations are not explicitly linked to specific findings.

• R3
  Disallow employees from drawing pensions from two simultaneous City jobs.
• R4
  Pensionable compensation should not include pay for two separate pay types, known as pension-pyramiding. 2009-10 Pension Tsunami: The D1. San Francisco should take steps to curb abuses from pension spiking by limiting Department of Will Not be Actions 1, 2 and 4: DHR is unable to implement recommendations 1, 2 and 5, as they require a Charter Billion Dollar Bubble the final pensionable income an employee can claim at retirement and from pension- Human Resources Implemented; Not amendment. As the third recommendation is directed to the Controller’s Office, DHR also cannot implement pyramiding. Warranted or Not this recommendation. The Jury suggests the following: Reasonable
• R5
  Use a three-year average to determine pensionable income, similar to Federal However, the fourth recommendation (disallow employees from drawing pensions from two simultaneous rules. City jobs) has been partially implemented and will hopefully be fully implemented in the future with the
• R7
  The Controller should perform an independent review of pensions to determine Hospital, Laguna Honda, Clinics) to ensure that there is better knowledge as to how staff are utilized that whether the practice of pension spiking is ongoing. work in more than one division. With the implementation of the new PeopleSoft system by eMerge, the
• R8
  Disallow employees from drawing pensions from two simultaneous City jobs. various payroll divisions should have real time knowledge of the hours worked by employees that work in
• R9
  Pensionable compensation should not include pay for two separate pay types, more than one division, so they can prevent employees from earning more than 80 pensionable hours in a known as pension-pyramiding. pay period. 2009-10 CGJ Year Report Title Recommendation Response 2011 Response 2011 Response Text Required 2009-10 Pension Tsunami: The D1. San Francisco should take steps to curb abuses from pension spiking by limiting San Francisco Fire Will Not be The SFFD maintains that pension spiking does not occur among its retirees. Any increases to final Billion Dollar Bubble the final pensionable income an employee can claim at retirement and from pension- Department Implemented; Not pensionable compensation are in accordance with established Citywide pay practices and procedures, pyramiding. Warranted or Not including applicable MOU provisions and Merit System principles. Increases can be attributed to negotiated The Jury suggests the following: Reasonable contract enhancements (pre- or post-retirement) or promotion in rank pre-retirement through the following
• R10
  Use a three-year average to determine pensionable income, similar to Federal MOU or DHR and Civil Service-approved appointment methods: Like Work-Like Pay, Acting Assignment, rules. Provisional or Exempt Appointment, or Permanent Appointment from an eligible list. Increases to final
• R11
  Limit final pensionable compensation to 120% of the rank pay rate as determined pensionable compensation do not occur for the purpose of inflating or "spiking" retirement benefits. It is not by Civil Service job classification. within the purview of the SFFD to comment on the Action Plan for any of the D1 bullets. Moreover, bullets 4
• R12
  The Controller should perform an independent review of pensions to determine and 5 do not occur in the SFFD. During the CGJ fact-finding phase, it was mentioned that these anomalies whether the practice of pension spiking is ongoing. were particular to the Nursing classification in the Public Health System. Finally, the SFFD is committed to
• R13
  Disallow employees from drawing pensions from two simultaneous City jobs. participate in any discussions that may occur regarding the first three bullets.
• R14
  Pensionable compensation should not include pay for two separate pay types, known as pension-pyramiding. 2009-10 Pension Tsunami: The E1. Department of Human Resources and collective bargaining units should meet Board of Will Not be FURTHER RESOLVED, That the Board of Supervisors incorporates and adopts as its own the response of Billion Dollar Bubble and confer to determine a cost-sharing arrangement to pre-fund the $4 billion Supervisors Implemented; Not the Mayor and the Department of Human Resources on Finding E1; FURTHER RESOLVED, That the Board unfunded liability for retiree health care obligations. Warranted or Not of Supervisors agrees with Recommendation E1; (Resolution 460-10) Reasonable 2009-10 Pension Tsunami: The E1. Department of Human Resources and collective bargaining units should meet Office of the Mayor Recommendation The City does have a large unfunded liability for retiree health care obligations. Through voter-approved BBiilllliioonn DDoollllaarr BBuubbbbllee aanndd ccoonnffeerr ttoo ddeetteerrmmiinnee aa ccoosstt-sshhaarriinngg aarrrraannggeemmeenntt ttoo pprree-ffuunndd tthhee $$44 bbiilllliioonn IImmpplleemmeenntteedd pprrooppoossiittiioonnss, tthhee CCiittyy hhaass bbeegguunn ttoo aaddddrreessss tthhiiss iissssuuee bbyy rreeqquuiirriinngg tthhee CCiittyy aanndd iittss eemmppllooyyeeeess ttoo ccoonnttrriibbuuttee ttoo unfunded liability for retiree health care obligations. the Retiree Health Trust Fund. The Mayor's Office will continue to work with the Controller's Office and DHR to address this liability. 2009-10 Pension Tsunami: The E1. Department of Human Resources and collective bargaining units should meet Office of the City Will Not be The Department of Human Resources is responsible for initiating meet and confer with employee bargaining Billion Dollar Bubble and confer to determine a cost-sharing arrangement to pre-fund the $4 billion Attorney Implemented; Not units and for advocating on behalf of the City in that process. The City Attorney's Office may, and does, unfunded liability for retiree health care obligations. Warranted or Not assist with that function, but under the Charter, the Department of Human Resources has primary Reasonable responsibility for the meet and confer process. For that reason, the City Attorney's Office cannot implement Recommendation E I, but we are ready to assist the department if requested. We note that the City and employee bargaining units are in discussions to address the unfunded liability for retiree healthcare and we will advise the City as requested. 2009-10 Pension Tsunami: The E1. Department of Human Resources and collective bargaining units should meet Office of the Recommendation In the winter and spring of 2011, the Controller's Office is participating in a working group analyzing and Billion Dollar Bubble and confer to determine a cost-sharing arrangement to pre-fund the $4 billion Controller Implemented developing ballot proposals, labor proposals and budgeting proposals to address OPEB liability, current unfunded liability for retiree health care obligations. health care liability, pension liability, other benefit and pension matters. The Mayor's Office and members of the Board of Supervisors will introduce one or more proposals for the Nov. 2011 ballot on this subject, and work through other City processes as well. Meet and confer processes for these proposals are underway. 2009-10 CGJ Year Report Title Recommendation Response 2011 Response 2011 Response Text Required 2009-10 Pension Tsunami: The E1. Department of Human Resources and collective bargaining units should meet Department of Recommendation Actions 1 and 2: This recommendation has been implemented to the extent possible, but DHR will continue Billion Dollar Bubble and confer to determine a cost-sharing arrangement to pre-fund the $4 billion Human Resources implemented to pursue expansion. unfunded liability for retiree health care obligations. Pursuant to Proposition B (June 2008 Ballot), all employees hired on or after January 10, 2009 must contribute 2% of their salary into the City’s Retiree Health Care Trust Fund Contribution, and the City contributes an additional 1% for each corresponding 2% contribution. Approximately 10% of the City’s workforce is making this mandatory contribution. This amount serves to entirely prefund those new employees’ retiree health benefits and a portion of the City’s unfunded liability for retiree health benefits for employees who were hired prior to January 10, 2009. Further, DHR has sought contributions to the Retiree Health Care Trust Fund from non-contributing employees through the collective bargaining process during the last two rounds of bargaining and will continue to do so in future labor negotiations. 2009-10 Pension Tsunami: The F1. The Mayor needs to appoint two Commissioners to represent the public's Office of the Mayor Will Not be These commission appointments have been made. Upon appointment, all commissioners are required to Billion Dollar Bubble interest. Implemented; Not discharge faithfully the duties of the particular commission or board to which they are appointed. In the case Warranted or Not of SFERS, the commissioners represent the interest of the members and their beneficiaries, not only the Reasonable public at large. 2009-10 Pension Tsunami: The F2. It is important for the public Commissioners appointed by the Mayor to attend the Office of the Mayor Recommendation All commissioners should attend regular monthly Board meetings. The board also has a committee structure BBiilllliioonn DDoollllaarr BBuubbbbllee BBooaarrdd mmeeeettiinnggss. TThheeyy sshhoouulldd aatttteenndd rreegguullaarr mmoonntthhllyy BBooaarrdd mmeeeettiinnggss oorr rreessiiggnn. IImmpplleemmeenntteedd tthhaatt aalllloowwss iittss mmeemmbbeerrss ttoo ddiisscchhaarrggee iittss dduuttiieess eevveenn iiff aa mmeemmbbeerr iiss nnoott aabbllee ttoo mmaakkee eevveerryy BBooaarrdd mmeeeettiinngg. 2009-10 Pension Tsunami: The F2. It is important for the public Commissioners appointed by the Mayor to attend the San Francisco Recommendation Commissioners are aware of their fiduciary duty, and of the importance of attending Board, Committee, and Billion Dollar Bubble Board meetings. They should attend regular monthly Board meetings or resign. Employee Implemented educational sessions. Attendance records are regularly and currently maintained. Retirement System Board