Why Is Public Employee Disability Claim Data Being Kept Secret?

Lawsuit says California pension agency withholds crucial data.

In the preamble to California's Ralph M. Brown Act, the state's 1953 law governing the public's access to government meetings, the Legislature noted, "The people of this State do not yield their sovereignty to the agencies which serve them." Likewise, the people "do not give their public servants the right to decide what is good for the people to know and what is not good for them to know." The public insists "on remaining informed so that they may retain control over the instruments they have created."

The same noble sentiment forms the foundation of California's public-records laws, which govern the release of government documents. Yet a new lawsuit alleges that the California Public Employees' Retirement System, which operates the largest state pension fund in the country, has been withholding some information that's necessary to help the public to oversee the system and protect it from waste, fraud and abuse. It deals with disability benefits paid to pensioners.

Specifically, the Nevada Policy Research Institute, which cofounded with California Policy Center Transparent California (the website that publicizes the pay and benefit packages received by California employees), argues that CalPERS has denied its "request for records which would document the type (service, disability or industrial disability) of benefit received," despite many requests. This information is so important because of the many news reports about the questionable workers' compensation claims, the lawsuit argues. CalPERS itself recognizes the problem—"it has established a disability fraud tip hotline where it encourages the public to call in and report cases of suspected disability fraud."

If CalPERS expects the public to help root out bogus disability claims by public employees, then why shouldn't it provide the public with information that helps it do so? The research institute is merely seeking a one-word designation of the type of pensions that California retirees are receiving. Such information has not been specifically exempted from the California Public Records Act. Anything not exempted is, according to the lawsuit, fair game for public disclosure.

"CalPERS' claimed sensitivity of information pertaining to the benefit 'type' (disability or service) is untenable because hearings related to appeals of denial of disability pensions are public hearings and recorded for broadcast," according to NPRI's court filings. Furthermore, the lawsuit argues that CalPERS "has consistently indicated" that it would not release that information. The lawsuit includes correspondence between NPRI and CalPERS backing that claim. CalPERS has yet to respond to the lawsuit and has declined comment to the media, but it has indicated that it believes such information to be an invasion of the recipient's privacy.

"It's highly unlikely CalPERS actually believes providing the one-word designation of the type of benefit received by its members is equivalent to providing a copy of their medical records, which is properly exempt from disclosure," said Robert Fellner, Transparent California's executive director, in a statement. Alleged disability abuses, of the sort that have recently been covered in the news media, "are naturally much easier to detect when the pension fund distinguishes disability benefits from a regular pension," he added. Furthermore, he noted that nearly two dozen independent pension systems in California already provide this information, so CalPERS is something of an outlier here.

NPRI pointed to a Los Angeles Times article titled, "Battling treacherous office chairs and aching backs, aging cops and firefighters miss years of work and collect twice the pay." It detailed Los Angeles' Defined Retirement Option Plan (DROP), in which police and firefighters, eligible for a pension equaling 90 percent of the average of their final years' pay at age 50, keep working and receive their full retirement and salary. After signing up for this lucrative program, some police and firefighters then take disability leave and are paid while they stay at home recovering from their injuries. In some cases, they allegedly have been involved in strenuous activities despite their disabilities.

The Times' analysis found that "police and firefighters in the DROP program were nearly twice as likely to miss work for injuries, illness or paid leave" and that "those taking disability leave while in DROP missed a combined 2.4 million hours of work for leaves and sick time and were paid more than $220 million for the time off." It also found that "more than a third (36 percent) of police officers who entered the program went out on injury leave. At the fire department, it was 70 percent."

Poynter.org refers to the Sacramento Bee's 2005 report that followed "sources within the California Highway Patrol alleging that high-ranking officers were making end-of-career injury claims to maximize their post-retirement income. They called it 'Chief's Disease.'"

In the private sector, disabilities are handled through insurance policies. Insurers are diligent before handing out large settlements, for obvious reasons. In the public sector where public money is at stake, it's a different story. Sometimes, disabilities seem to be viewed as an entitlement. According to a 2012 report, "Disability retirement is intended for public safety workers with dangerous jobs who become permanently incapacitated by illness or injury. But over the years, it has also become an escape hatch for unwanted police officers and firefighters and a way to pad the pensions of those at the end of their careers, an Orange County Register investigation has found."

The courts of course need to look at any specific allegations on a case-by-case basis. But there's a clear need for more information to help improve oversight—something CalPERS has been reluctant to provide. But as California lawmakers noted when they drafted the Brown Act, the people did not grant CalPERS the right to decide what we should and shouldn't know. CalPERS should live up to the spirit of the state's historic open-government laws and hand over the information requested by the Nevada Policy Research Institute lawsuit.

This column was first published by the California Policy Center.

Steven Greenhut is contributing editor for the California Policy Center. He is Western region director for the R Street Institute. Write to him at [e-mail].