But instead of asking them for the money back, the board that oversees the fund is going after another source: the city of San Jose. City leaders, however are fighting back, insisting taxpayers shouldn't pick up the tab on the retirement system's
The legal battle is the latest dispute over pensions in San Jose, just weeks after voters approved a measure to settle costly legal troubles over Measure B, a 2012 ballot measure that trimmed employee retirement benefits.
The city's non-public safety employees' retirement group filed a lawsuit
Records requested by this news organization show one retiree,
"We were never overpaid. We made our contributions -- this is money that we've earned," Tanda said Monday. "It wasn't until 12 years after I retired they informed me that the fund they were using had a limit on it. It hit me like a ton of bricks. I couldn't believe it. I thought they were kidding."
The incorrect payments were overlooked despite annual financial audits conducted by an outside firm, said
"It is our responsibility to monitor that. Clearly some of them fell through the cracks," Peña said. "And we now have implemented new controls to make sure this doesn't happen again."
The retirement board had the option of collecting the money from the 12 overpaid retirees. But the board instead voted unanimously to go after the plan sponsor -- San Jose -- for the money.
"The board felt this wasn't a mistake of the members," Peña said. "Quite honestly we made a mistake and didn't have the right controls in place to make sure we catch every member that went over the limit."
The limits set by the
In its lawsuit, the Federated City Employees' Retirement System, which represents 8,500 current and former city employees, estimated the overpayments totaled
Critics say other cities and counties have set up alternative funds to cover benefits that exceeded the
"The buck stops with them," Doyle said of the retirement plan. "We've already paid this bill once and now they're coming after the taxpayers to pay again for their mistake. We're looking after the taxpayers -- someone has to be -- because the retirement board certainly doesn't care about the taxpayer."
Doyle added that the retirement board has insurance to cover errors like this. But the lawsuit claims that wasn't an option because the insurance only covered claims against the system -- not its own mistakes.
The lawsuit isn't the only legal trouble brewing for San Jose. About 25 city employees whose benefits were cut to comply with the
"We want San Jose to live up to its promise," said
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