Yuba City Unified pension audit finds $536K in overpayments

More than $500,000 in pension overpayments may be recovered from 54 Yuba City Unified School District retirees due to a reporting error on the district's behalf, according to a spokesman for the state teachers retirement system.

Dozens of Yuba City Unified retirees who left the district between 2002-09 are being asked to pay back portions of the $563,600 that was misreported, said Ricardo Duran, a spokesman for the California State Teachers' Retirement System.

To repay the amount, retirees could receive monthly pension checks that will be reduced from $12 to $922.

"It's a painful situation for the affected retirees," Duran said.

If retirees can't pay their share during their lifetime, Yuba City Unified would have to help repay part of the sum, he said. However, the two sides haven't yet decided on how much the district will pay under those circumstances.

The error occurred when the district added $127,000 worth of retirement incentives into each person's core pension account, which builds up money and doesn't run out during retirement, Duran said. The money should have gone, instead, to a savings-type account, which compounds at a slower rate and can eventually run dry during retirement.

The disparity was found during an annual audit that looked into the two accounts.

"They looked a little out of the ordinary," Duran said.

Jonathan Barth, assistant superintendent of business services at Yuba City Unified, said the district already plans to appeal the audit findings.

"Ultimately the district's goal is to make sure we are advocating on behalf of our retirees, as well as look after our district's interests," Barth said.

Now that it has received the retirement system's final report, the district has 90 days to appeal for an administrative judicial review. The hope of district administrators, Barth said, is that the account error not be blamed on the retirees.

Since 2009, the problem has been corrected, Barth said. But that doesn't make facing the repayments any easier.

"This is an unfortunate time for this to happen to the district," he said.

Retired Yuba College teachers faced a similar situation in 2011, when they were forced to receive smaller pension checks after the state retirement system lowered their salaries because of so-called pension spiking.

Teachers who chose to accept reduced workloads in their years leading up to retirement received a 10 percent salary stipend that was not an approved method of compensation, according to the state retirement system.

A study, at that time, indicated that it would cost Yuba College about $7 million to make up for the lost compensation.

How much Yuba City Unified's current predicament will cost it has yet to be seen.

CONTACT Griffin Rogers at grogers@appealdemocrat.com or 749-4783. Find him on Facebook at /ADgriffinrogers or on Twitter at @ADgriffinrogers.