SAN JOSE — Four months after he was diagnosed with esophageal cancer, retired San Jose Fire Capt. Tom Gianatasio got another dose of dreadful news: He owes $34,042 because of a city error causing pension overpayments for two decades.
“Somebody made a mistake and now I have no recourse,” Gianatasio said, one day before he went in for a more than 6-hour surgery to attempt to remove the cancer. “I have this stress hanging over my head. It’s just not fair.”
The 66-year-old is one of 10 San Jose Fire Department retirees who each were overpaid by more than $13,000, public records reviewed by this newspaper show, and among hundreds who could be asked to pay some amount back.
It is the latest blow to city retirees who saw their pensions come under fire over the last decade as San Jose leaders sought benefit cuts to slow a spike in city costs. For retirees, that meant leaner health benefits.
Retirement officials say the overpayment happened because San Jose’s finance office gave them inaccurate salary figures, which were used to calculate pension checks. About 300 of San Jose’s 2,000 retired officers and firefighters were overpaid nearly $1 million for at least two decades, though for most, the overpayment was a couple hundred dollars.
And although city officials discovered the error in a 2009 audit, the overpayments continued and the affected retirees weren’t notified about the errors until last month.
“I don’t understand how they let it go on for so long,” said Gianatasio who retired in 2009 and now lives in Washington state. “If I thought I was overpaid, I would have stopped it. I would have done something seven or eight years ago.”
Roberto Peña, director of San Jose Retirement Services Department, says it took his office seven years to sift through a series of “complicated” records to figure out who got overpaid, by how much, and how to fix the problem.
Officials still haven’t determined exactly how to recoup the $1 million in overpayments — they could demand the money from the city, the retirees or a combination of both. The topic was discussed at a San Jose police and fire retirement board meeting last week, but no decisions were made.
It’s the second stunning mishap involving overpayments to San Jose city retirees.
A similar problem surfaced in November when officials discovered $500,000 in overpayments to a dozen non-public safety retirees. The city-appointed board overseeing that pension fund voted unanimously to go after San Jose with a lawsuit seeking reimbursement of $882,007 — which included $500,000 in overpayments plus interest.
Peña, who administers both retirement plans, said the goal is to find a remedy that is “fair, reasonable and legal given the circumstances of the situation.”
City spokesman David Vossbrink declined to say whether the city should be on the hook for the entire repayment, but said there’s a “joint responsibility” for the error between the city, retirement officials and retirees. The police and fire retirement board last week decided to adjust the future benefits of the impacted retirees to stop the overpayments.
That means retired Battalion Chief Stewart McGehee, 64, will get $220 less on his pension check each month. McGehee, who retired in 2011, was overpaid by $13,864.
He thinks the city should be responsible for the overpayments — especially because officials discovered the error in 2009, but apparently let the overpayments continue. McGehee said he and his fellow retirees don’t trust City Hall and worry mistakes will happen again.
“If the city knew this was a mistake and they let this continue, I don’t see how retirees could be expected to repay what the city knew were bad numbers,” said McGehee, a Livermore resident who now works in a civilian position at the Oakland Fire Department. “Why would you not stop it right then and there?”
McGehee says the $220 reduction will “hurt,” but he’s more concerned for widows on the retirement plan. They’re already given a reduced portion of their spouse’s pension, he said, and now they might be responsible for the overpayments.
“There are widows who are on the survivor benefits of a third or half of the retirement, and if they have to pay it back – I don’t know,” McGehee said.
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Mike Alford, president of the Association of Retired San Jose Police Officers and Firefighters, echoed the concern.
“My problem is the widows who will be on the hook for five or 10 grand, that is going to be devastating,” said Alford, a retired San Jose police detective. “If you’re on a fixed income, any hit like that is going to hurt. That’s gross negligence on the part of the city.”
Gianatasio’s wife Karen lives with that fear every day. The doctor painted a grim picture, she said, and she fears her husband will lose his battle with cancer in a few years.
“You’ve got your husband dying and your income goes in half — and now they want you to pay extra money,” Karen Gianatasio said. “I can’t spend all my life savings on this when he passes away. I didn’t expect to be alone.”
Gianatasio is among three retirees with the highest overpayments — behind a retired deputy fire chief who was overpaid $53,085 and a former battalion chief overpaid $47,818. For now, he was told his future payouts would be reduced by $20 a month. But the situation, Gianatasio said, adds “insult to injury.”
He said firefighters like himself put their lives in danger every day on the job, and after a career of exposure to toxic smoke, are at higher risk of disease in retirement. His best friend in the department just died of cancer. Now, they’re being punished for someone else’s mistake.
“They’re taking advantage of people who already put in their time,” he said. “I’ve been dealt the cards I’ve been dealt. Do I think about it? Every day I think about it.”
