The Pension Disclosure Battleground

Public fund boards are increasingly under media pressure to disclose the identity and pension benefits of retirees. Historically, disclosure requests were confined to elected officials or other government employees with public profiles (e.g. university presidents, Division I-A football and basketball coaches.) Now, disclosure efforts are focused on “high end” pensioners – typically those with annual pensions above $100,000 per year – regardless of position or notoriety.

The main tools in this battle are state “right to know” or similar public disclosure laws that purportedly require the disclosure of compensation paid by governmental entities. The counter argument to disclosure focuses on the confidentiality and privacy rights of the retirees. At least three such cases have been decided in favor of disclosure in California, and others are working through various court systems. See Sacramento County Employees’ Retirement System v. the Sacramento Bee, 195 Cal. App. 3rd 440 (2011); California Foundation for Fiscal Responsibility v. San Diego County Employees Retirement Association, (D058962) Cal. App. 4th (2011); and Sonoma County Employees’ Retirement Association v. Superior Court (The Press Democrat), (A130659) Cal App. 1st (2011).

There are two interesting developments in this area. First, it has been reported that Oregon legislators plan to introduce a bill which strengthens that state’s privacy laws and clearly prohibit the release of member-specific information, such as names and pension benefit amounts.

Second, there is considerable momentum for a “middle ground” in the disclosure battle. Specifically, both sides would agree that the vast majority of high end pensioners worked in relative anonymity during their careers and their pension benefits are functions of long service at compensation rates commensurate with their profession (e.g., physicians, computer information officers, attorneys). Conversely, certain public employees, such as coaches and elected officials, are public figures and would have a lessened expectation of “privacy” regarding the publicly funded pension benefit.

We have recommended to boards, in both fiduciary training and policy formation, the development and implementation of such disclosure guidelines. This is, in certain respects, analogous to the legal principles under defamation law which provide reduced protections to “public figures” as compared to private individuals. As disclosure cases proceed throughout the country, and state legislatures consider possible modifications to member confidentiality laws, it will be interesting to see whether this approach gains traction.