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Former Vernon city administrators see their large retirement packages cut

City of Vernon

Eric Zassenhaus/KPCC

File photo: City of Vernon

Former Vernon city administrators who received large compensation packages are getting their retirement benefits slashed, according to the Los Angeles Times. Officials are calling it the largest public pension reduction in California history.

One of those administrators, Bruce Malkenhorst, had the biggest public pension in California: $545,000, according to the Times. His annual benefit is being cut to around $115,000. Malkenhorst's successor, Eric T. Fresh, is having his pension cut completely. Fresh made as much as $1.6 million in 2008, with experts estimating he would have received around $300,000 a year for his pension.

This follows an audit by the California Public Employees Retirement System (CalPERS) that said Vernon improperly increased the retirement benefits of top employees, according to the Times.

It remains unclear whether the decision will be challenged, either by those with their pensions cut or by the city. Malkenhorst's pension is being cut because CalPERS' audit concluded the city failed to substantiate the pay rate he received, saying the only one properly reported for purposes of his pension was his job as city clerk. Fresch is losing his entire pension because CalPERS concluded he wasn't a city employee but an independent contractor.

Three other Vernon officials are losing their pensions, the Times reports, and CalPERS found problems in the pensions of two of the city's current leaders. A retirement fund spokesman said the fund would collect any overpayments made in the past three years, while State Sen. Kevin De Leon has said he plans to formally request a criminal investigation.

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