📆April 15, 2026

"Taxation is Theft Day!"

CalPERS sent retirees ‘shocking’ bills. They’re getting their money back

By Adam Ashton, CalMatters

The CalPERS regional offices in Sacramento on March 15, 2022. Photo by Miguel Gutierrez Jr., CalMatters

This story was originally published by CalMatters. Sign up for their newsletters.

CalPERS on Tuesday gave up a seven-year legal battle to claw back hundreds of thousands of dollars from four pensioners who the fund accused of breaking the rules about working after retirement. 

The end of the saga is meaningful not just to the retirees who no longer face “shocking” payment demands from their pension fund, but also for cities that turn to former government employees as part-time workers for short-term staffing needs.

At one point, CalPERS adjusted benefits for the retirees in a way that caused them to lose monthly income. Under the settlement, they’ll earn what they were due on their original retirement dates.

The four retirees “got restored to where they should have been seven years ago,” said Scott Kivell, the attorney who represented the pensioners through numerous court and administrative hearings. “It really wasn’t a settlement. CalPERS caved in and said they would give my clients everything.” 

The case dates to 2018 when CalPERS began looking into five retirees who worked for Regional Government Services, a firm that provides consultants and independent contractors to local government agencies. Each of the retirees had gone to work for the firm, which placed them in various cities.

CalPERS auditors determined that the retirees were performing work under the direction of city supervisors, and that they were acting more like local government employees than independent contractors reporting to a private company. 

That’s a violation of California retirement law, which strictly caps the number of hours that retirees can work for government agencies that provide benefits through the California Public Employees’ Retirement System. 

As CalPERS evaluated the retirees, it sent them overpayment letters saying they had incorrectly received pension income and that their retirement dates would be adjusted to when they stopped working for Regional Government Services rather than when they left civil services.

One retiree, Margaret Souza, in 2022 received a “past due notice” from CalPERS saying she was overpaid $846,292. 

Another, Tarlochan Sandhu, in a February 2022 notice from CalPERS, was told he owed $454,474.

David Dowswell got a “past due notice” saying he owed $664,289.

And Douglas Breeze’s widow got one saying she owed $36,192.

For the most part, CalPERS’ determination that retirees were in conflict with state law held up in court. CalPERS lost just one case when the five employees sued the fund. That was Linda Abid-Cummings, who won her lawsuit in Sacramento Superior Court, The Sacramento Bee reported.

Just last year, the 3rd District Court of Appeal found CalPERS was justified when it determined Sandhu’s work for Regional Government Services violated California retirement law.

But a more recent decision by an administrative law judge focused on the penalties and clawbacks CalPERS wanted to assess. It found the fund violated a three-year statute of limitations in how far back it could collect reimbursement for retirement law violations. 

CalPERS’ review of Souza, for instance, went as far back as 2011. It sent her the “past due notice” describing the massive overpayment in February 2022.

Souza and the others received subsequent letters demanding lower sums, a practice the administrative judge Juliet Cox criticized in her January ruling.

“CalPERS staff members have sent inconsistent demands, in some cases for shocking sums, to Sandhu, Souza, Dowswell, and Breeze's widow. Their communications have been error-riddled and opaque,” Cox wrote. 

CalPERS did not accept Cox’s determination immediately. Its staff wrote to the CalPERS Board of Administration recommending that it reject Cox’s decision and send the case to another administrative hearing.

But, just before the board was scheduled to vote on that recommendation, CalPERS reached an agreement with the employees and the cities that hired Regional Government Services Authority. 

Regional Government Services Executive Director Sophia Selivanoff urged the CalPERS board at its meeting to go further by declaring Cox’s ruling as a “precedential decision”, a formality that she said would stress to CalPERS that it must abide by the three-year statute of limitations when investigating retirement law violations and recalculating benefits.  

The board did not take that step. After the meeting, representatives for CalPERS in a written statement said the terms of the settlement would prohibit Cox’s decision from setting precedent. 

“We disagree with certain characterizations in (Administrative Law Judge Cox’s) proposed decision,” CalPERS representatives said. “CalPERS staff works diligently to assist members, always striving to provide accurate and straightforward information to them, and did so here.”

Selivanoff told the board that pensioners who are open to part-time work need clear, “bright lines” to understand the rules of post-retirement work, as do the local governments that want to hire them.

“There are plenty of union retirees who are at the same risk of having these unlimited damages land in their lap in any kind of mistake they do in trying to help out post retirement,” she said in an interview with CalMatters. 

Attorneys for three major groups representing the local government agencies that participate in CalPERS — the League of California Cities, the California State Association of Counties, and the California Special Districts Association — also wrote a joint letter urging the pension board to give more weight to Cox’s decision. They called CalPERS “inconsistent” in “these situations.”

“Lacking transparency, CalPERS staff practices have, at times, appeared to create underground regulations and inconsistent processes that are not known to” local government employers, they wrote. 

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

Candidates for California governor ought to get serious about these pressing issues

By Dan Walters, CalMatters

This commentary was originally published by CalMatters. Sign up for their newsletters.

Eric Swalwell’s abrupt departure from the campaign for governor due to revelations about sexual transgressions leaves nine men and women remaining as serious contenders for spots on the November ballot.

So far their campaigns have produced a scattershot of positions and promises that have only occasionally touched on California’s real world issues. However, by sheer coincidence, there’s been a recent flurry of think tank reports and articles on those issues that should be required reading for would-be governors and moderators of forums to question the candidates.

In no particular order:

Schools

The Public Policy Institute of California delved into the worrisome lack of academic achievement among in California’s public schools. It notes that in state tests just 49% of students met or exceeded state standards in English language and 37% in math.

Results of federal tests were even less satisfactory, with only 29% of fourth-graders and 28% of eighth-graders proficient in reading and 35% and 25%, respectively, in math.

Mississippi, long a laggard in academic skills, got serious about raising reading comprehension by adopting phonics. California, after years of political debate, finally semi-adopted phonics, although not completely requiring it. An article in Atlantic magazine reveals that in Mississippi, just adopting phonics was not enough; statewide mandates, coupled with state oversight, were needed to make phonics work — a suggestion maybe California needs to follow suit.

Jobs

Outgoing Gov. Gavin Newsom loves to brag about California’s $4 trillion economy but rarely mentions the darker side — several years with virtually no job growth. The Public Policy Institute of California digs into that stagnation and reports, “Job gains have been limited to a few key sectors like health care and local government, while stock market gains have been driven by AI. Unemployment has not increased much in the past two years, though it remains higher than in 2022 and above almost all other states.

 “One major challenge for the next governor will be providing expensive services like health care to a growing older adult population while the share of workers shrinks,” PPIC says.

The conservative Pacific Research Institute plows the same economic ground in a report. “The data shows that California’s economic challenges are no longer theoretical — they are measurable and worsening,” said Wayne Winegarden, one of the report’s authors. “The state’s weak job growth and shrinking private sector signal that California is at a crossroads. Without meaningful policy reforms, the gap between California and the rest of the country will continue to widen.”

One aspect of California’s economic sluggishness is an outflow of workers due to its sky-high living costs. Another report from the Public Policy Institute of California says the state has seen a net loss of nearly 1.3 million people since 2020. The outflow, coupled with a record low birth rate, makes California especially reliant on immigration for new workers, which in turn is affected by turmoil in federal immigration policy.

Homes

A study by UC-Berkeley’s California Policy Lab delves even further into the state’s loss of population to other states, citing high living costs, especially for housing, as the prime factor.

It notes that “in 2012 the state’s median household income was roughly sufficient to qualify for a mortgage on a mid-tier home, but it now falls substantially short of the level needed to qualify for even a bottom-tier home.”

However, those who abandon California more easily become homeowners due to much lower prices and see improvement in their overall financial wellbeing.

This is not an exhaustive catalogue of California issues that the campaigns for governor should address. Water supply and homelessness also need attention, as well as the insurance crisis and the state’s chronic budget deficits. But these reports are a good start for serious debate.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

Court strikes down California law targeting dialysis industry profits

By Ana B. Ibarra, CalMatters

This story was originally published by CalMatters. Sign up for their newsletters.

A federal appeals court ruled last week that California's attempt to limit how much dialysis companies profit from certain privately insured patients is unconstitutional — a victory for an industry that has repeatedly beaten back efforts to control its costs.

The 9th U.S. Circuit Court of Appeals struck down key pieces of Assembly Bill 290, a law designed to limit how much dialysis companies could profit from privately insured patients who receive premium assistance from charity groups. 

About 800,000 people in the U.S. suffer from end stage renal disease, a condition that requires being connected to machines that filter their blood for up to five hours several times a week. 

Most dialysis patients — about 80% — are on Medicare. But when patients end up on private insurance instead, costs balloon. Individual marketplace plans pay roughly three times what Medicare pays for dialysis, according to a 2021 study from the University of Southern California. Though dialysis patients make up just a sliver of the individual market, their average monthly costs run 33 times higher than other enrollees — driving up premiums for everyone else.

"The issue is that dialysis care is just significantly more expensive in the individual market, and it has to do with how consolidated the market has been allowed to become," said Dr. Eugene Lin, assistant professor of medicine at USC and co-author of the study.

A Contested Practice

At the center of the legal dispute was an alleged practice that supporters of the law referred to as a “profit maximizing scheme.” Dialysis providers DaVita Inc. and Fresenius Medical Care donate to the American Kidney Fund, a nonprofit that provides premium assistance to some 3,000 dialysis patients in California. For years, insurers, consumer advocacy groups and unions have claimed that in exchange for those donations, the American Kidney Fund steers patients away from public insurance — Medicare and Medicaid — and into private insurance by paying for their premiums. This benefits dialysis providers because private insurance tends to pay at higher rates than public payers. The American Kidney Fund has long denied the accusations.  

Lawmakers designed AB 290, which Gov. Gavin Newsom signed into law in 2019, to target that alleged practice. First, it capped the reimbursement rate that dialysis providers can receive for privately insured patients who receive premium assistance from nonprofit charities. The law set that reimbursement cap to what Medicare pays. It also required that those charitable organizations disclose the names of patients who receive premium assistance, so that insurers could know which patients have capped reimbursement rates. 

DaVita and Fresenius, along with the American Kidney Fund and a group of patients, sued the state soon after the law passed, keeping it from going into effect. 

Last week the 9th Circuit ruled these provisions unconstitutional. The court found that the law’s reimbursement cap and the patient disclosure provisions violate the First Amendment by burdening the American Kidney Fund’s right to associate with DaVita and Fresenius. If California’s intent was to protect patients from abusive practices and prevent distortion to the insurance risk pool –  something that happens when health plans take on more high-cost patients – the state did not narrowly tailor the law’s provisions to achieve those interests, the judges said. 

A district court previously struck down a separate provision of the law, which more directly banned clinics from steering or advising patients on insurance plan options. That court said California did not produce enough evidence to sustain its argument that charities or clinics are steering patients.

The appellate court’s ruling drew praise from the industry. DaVita said it was “encouraged that the 9th Circuit found AB 290 unconstitutional and unenforceable.”

LaVarne Burton, president and CEO of the American Kidney Fund, called the decision “a resounding victory for people with kidney failure who cannot afford the cost of health care.”  

The California Department of Managed Health Care and the Department of Public Health defended the law in court, represented by the State Attorney General’s Office. The departments issued a joint statement that they are “currently reviewing the ruling, the impacts of the decision and appropriate next steps.”

For now, the ruling leaves things as they are. Dialysis patients who currently receive premium assistance from the American Kidney Fund will see no immediate changes. But the court’s decision leaves unresolved concerns about overspending in dialysis care.

“I think a huge issue with the way we think about kidney care in this country is that we don't,” Lin said. "Even though, as taxpayers…we all should be thinking about this more so than any other chronic disease because it's so expensive.”

Supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, at a price they can afford. Visit www.chcf.org to learn more.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

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