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Thursday, July 18, 2024 | Back issues
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Fight Brewing Over San Diego Pension Scheme

SAN DIEGO (CN) - A class action brought by a San Diego police officer who claims the city stiffs unmarried employees of benefits given to married workers moving forward, although in whose courtroom has yet to be decided.

San Diego Superior Court Judge John Meyer heard Tuesday from plaintiff Deborah Ganley as to why the case should be transferred to another San Diego judge, Richard Strauss.

The class action filed by Ganley on Jan. 6 claims marital status discrimination by the city via the pension retirement program that city employees pay into.

Ganley says employees who are married the day they retire receive a special "surviving spouse benefit," while unmarried employees like her receive a substitute benefit. The benefit given to unmarried employees is essentially a life insurance policy, while a spouse who outlives a city employee will continue to receive 50 percent of the deceased's pension.

But Ganley claims the substitute benefit she has been paid is worth at least $50,000 less than the surviving spouse benefit received by married employees. She retired in 2015.

Ganley also claims the city subsidizes the surviving spouse benefit because the rate at which current employees pay into the pension system can't cover the cost of it. The substitute benefit received by unmarried city employees is not subsidized and its rate was last adjusted in 1979, according to Ganley.

In 2001 and again in 2011, a study found unmarried retirees collectively received about $1.5 million less per year than married retirees, Ganley claims.

Michael Conger, Ganley's attorney, said the current value of the subsidy is $130 million.

Conger represented a similar case that was settled in 2015 on the eve of the trial. Strauss presided over Wood vs. the City of San Diego for over four years, understands the ins and outs of San Diego's pension system and should be the judge to oversee the latest case filed against the city, Conger said.

"If you don't fully fund your pension, it's always at risk," Conger said. "There's no good reason for the government to pay married people more than unmarried people. I would ask the city instead of embracing discrimination, to fix it."

City Attorney Joe Cordileone said the city decided to settle the Wood case because it would have cost three to four times more to go to trial. But he said issues brought in the Ganley case "are not quite as simple" as Conger made them out to be.

The city does not want the case transferred to Strauss and has filed an opposition.

Meanwhile, the San Diego City Council will not be able to review the case and direct Cordileone on a course of action until Jan. 26, the city attorney said. He said neither he nor any of his colleagues will be able to represent the city as the case moves through court due to a conflict of interest, as they also receive pension benefits as city employees.

"It's ridiculous to ask the city to just roll over without having the chance for the council to consult with their lawyers," Cordileone said.

"[Conger] makes it sound like a simple open and shut case. We're not talking comparing apples to oranges, we're talking about comparing apples to orangutans. He's completely wrong. The city has done nothing wrong."

In a letter sent this past month to Mayor Kevin Faulconer and city councilmembers, Conger suggested a way to rectify what his client claims is the pension disparity in benefits received by employees based on their marital status: requiring employees to pay the full cost of the surviving spouse benefit as originally intended when the benefit was created in 1971, rather than subsidize the cost.

Conger also suggested in the letter the city pay out $10 million to resolve the claims rather than go through litigation.

The attorney said the Ganley case makes exactly the same claims as the Wood case settled by the city in 2015, where the plaintiff was awarded $68,000.

In a letter responding to Conger, Cordileone noted "no decision dealing with tens of millions of taxpayer dollars can be made without the city council and mayor being fully apprised of all of the issues."

Meyer will consider whether to transfer the case over to Strauss. A hearing has been set for Feb. 11.

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