Pension Benefits Case Raises Complex Issues in San Diego

Ron Saathoff, the president of the San Diego firefighters union has sued the city of San Diego, asking it to honor his retirement benefits that were canceled two years ago after an investigation by the IRS concluded that it violated federal tax laws. Saathoff's suit asks the Superior Court to order the city to repeal an ordinance that canceled his benefits and pay him what has been owed from 2002 through 2008, with interest.

At issue is a “presidential leave” benefit. In 2002, the city agreed to let Saathoff combine his salary as union president with his salary as a city worker for the purposes of determining his pension. The creation of that benefit is part of two criminal proceedings involving Saathoff and other former members of the city pension board. The cases, (one in state court and one in federal court), accuse Saathoff and others on the retirement board with self-dealing and fraud stemming from the board's approval of a city proposal to permit the city to put less money into the pension fund than required, in exchange for additional in benefits in labor contracts. According to the San Diego Union-Tribute, prosecutors in both cases allege Saathoff got the benefits in exchange or his support of the underfunding deal.

In response to the IRS investigation, the city enacted an ordinace eliminating the "presidential leave" benefit, as well as other benefits previously agreed to. A group of other firefighters are also challenging the city's action in the same law suit.