A former Riverside County official who spent her career managing the estates of people who died without heirs says she never imagined a part-time consulting gig would put her retirement in jeopardy — but that’s exactly what happened when the California Public Employees’ Retirement System demanded she repay more than $1 million.
Linda Samsom retired from Riverside County after decades overseeing unclaimed estates and indigent burials. Around the time she left, the Yolo County Sheriff’s Office reached out, hoping she could help build a similar program from scratch. She signed on as a “consulting specialist,” writing policies and procedures for the new office.
“I love the work. I enjoy the work. I was happy to help Yolo set up this office, they were so gracious and so appreciative,” Samsom said.
Over the years, according to pay data published by Transparent California, she earned between roughly $7,200 and $23,000 annually through the arrangement, all while collecting a state pension of about $10,000 a month.
Then came the letter.
CalPERS auditors determined that Samsom’s $50-an-hour pay rate exceeded what a comparable government position would pay, putting her in violation of California’s laws governing retirees who return to public-sector work. The consequence: CalPERS wanted back every dollar of pension income she’d received during the roughly eight years she worked the Yolo County contract — a bill of $1,050,875. Her only alternative was to accept a permanent 50% cut to her monthly pension.
“The emotional roller coaster I’ve been on has been absolutely frightening,” Samsom said. “I go from being in a panic thinking of what will happen if my pension is cut in half to being really angry that CalPERS, which I believed belonged to the retirees and the government employees, could do this to us.”
Samsom is now suing CalPERS in San Francisco Superior Court, arguing the agency is ignoring a three-year statute of limitations that should apply to pension errors and that its penalties are disproportionate to the alleged violations. A CalPERS spokesperson said the agency had not yet been served with the lawsuit and declined to comment on pending litigation.
In related administrative proceedings, CalPERS has argued there is no time limit on pursuing violations of the post-retirement work rules, characterizing them not as innocent mistakes but as deliberate attempts to skirt the system. State law does require retirees to repay pension funds if they return to work illegally.
The lawsuit comes just months after CalPERS settled a separate, years-long dispute with four other retirees who had been hired as consultants in various city governments through a private staffing firm. Like Samsom, those retirees were blindsided by demands for repayments approaching $1 million. CalPERS backed off that effort in April.
Attorney Scott Kivel, who represents Samsom, said his client had no reason to think she was breaking any rules.
“She thought she was doing a good thing,” Kivel said. “She had no idea that eight years later CalPERS would come after her and say, ‘You violated the law because you were paid this slightly higher amount than a comparable position.'”
**A system under scrutiny**
At the center of these disputes is CalPERS’ office of audit services, which is responsible for ensuring that public employers and workers make correct pension contributions and that retirees receive accurate benefits. Given that CalPERS oversees a portfolio now worth roughly $658 billion — the largest public pension fund in the country — getting those numbers right is no small task.
The audits are designed largely to prevent so-called double-dipping, in which retirees draw both a pension and a paycheck from a California public agency. State law limits how many hours retired employees can work for government agencies specifically to guard against that overlap.
The audit that ensnared Samsom actually stemmed from a broader review of how Yolo County uses retired workers. County spokesperson Will Arnold said officials are still reviewing the findings and will decide whether policy changes are needed.
These audits can catch both workers and the agencies that hired them off guard, sometimes resulting in expensive corrections on both sides. In April, organizations representing California cities and counties sent letters urging the CalPERS board to apply clearer, more consistent standards when determining whether retirees’ part-time roles comply with the law.
State lawmakers have taken notice. Last month, the Legislature passed Senate Bill 1038, which would require CalPERS to give employers earlier notice of audits and require those employers to alert relevant public employee unions when investigations begin. The California School Employees Association, one of the state’s largest public worker unions, backed the bill to protect members caught up in these reviews.
“Public employees and their unions are important stakeholders in the audit process, and quick resolution benefits everyone — especially in cases where an ongoing payroll reporting error compounds over many months or years,” the union wrote in support of the legislation.
**A pattern retirees say needs fixing**
Samsom isn’t the only plaintiff in the new case. David Dowswell, a retired public employee who later did consulting work for the city of Dixon, faced a nearly identical ordeal. He was hired through a third-party firm, Regional Government Services, in an arrangement both he and city officials believed followed pension rules.
Years later, CalPERS determined otherwise.
“The largest pension fund in the United States by far sends me an invoice that I owe them $1,064,000 and I have 30 days to repay. If you didn’t see it in black and white, there’s no way you’d believe it,” Dowswell said.
His pension was ultimately restored in April as part of a settlement CalPERS approved after an administrative law judge ruled in his favor, along with three others who had worked through the same staffing arrangement. But the road to that outcome was rocky — a California appeals court had previously sided with CalPERS at an earlier stage of the case, and the final settlement stopped short of establishing any formal statute of limitations for these violations.
That unresolved question is part of why Dowswell joined the new lawsuit — he wants a court to settle, once and for all, how far CalPERS can go in demanding repayment from retirees years after the fact.
“CalPERS shouldn’t be allowed to just run roughshod over their retired annuitants,” Dowswell said, referring to the state’s term for retirees who return to work. “[CalPERS] should be like any other agency, obligated to follow the law, not just apply it as they see fit.”
Original source: CalMatters
