The $64,000 Question: Can Shawn Nelson Get Out of His Pension?

Orange County Supervisor Shawn Nelson. (Photo credit: OCLNN)

Orange County Supervisor Shawn Nelson. (Photo credit: OCLNN)

While running for a vacant Board of Supervisors seat this summer, Supervisor Shawn Nelson evangelized against public employee pensions.

But as soon as he got into office, Nelson signed up for the most  generous pension benefit available -- one that, according to the Liberal OC, would give him $64,000 annually if he served two terms as supervisor.

When word got out on this, Nelson said he opted in on accident. Now it seems he is desperately trying to get out.

Orange County Employees Retirement System Chief Executive Steve Delaney would not name names, but he confirmed this week that OCERS has been contacted regarding how an elected official could get out of a pension he signed up for.

"We have been asked if an election made by an elective official is always legitimate," Delaney said. "We have responded saying, 'Present the facts.' And then we can determine if an election was legitimate or not."

What is definitely clear at this point is that Nelson is in some legitimate trouble with his conservative backers.

When Red County's Chip Hanlon read about Nelson's pension choice, he asked in his column, "WTF?!"

Meanwhile, Anaheim Councilman Harry Sidhu, who was runner up in the June primary, pounced quickly. He immediately sent out news releases promising that if he were to win office, he would refuse a pension.

Most local politicos agree that Nelson still has a solid lead in November's contest, especially given that Sidhu ran a lackluster campaign in the primary. But the pension issue can turn torrential.

So it seems Nelson is coming around to the idea that his best option regarding his pension election might just be a strategic retreat.

Delaney bristled at the suggestion that an accommodation might be eminent.

"OCERS doesn't do deals," said Delaney, who would not say who contacted his office on Nelson's behalf.

However, there seems to be a chance that Nelson could opt out based on a technicality. The key is the date that he made his selection into the system.

Under the state law that governs county retirement systems, elected officials actually have to decide to opt into receiving public benefits. But the law isn't clear on when someone actually becomes an "elective officer."

Is it the day a candidate wins the election, or when they are legally sworn in?

So a big question will focus on when Nelson filled out his paperwork. A potential argument being that Nelson wasn't actually an elected official when he filled out his papers so he gets a do-over.

Either way, Nelson still can redo his pension choice in November if he wins. OCERS General Counsel and Assistant CEO Julie Wyne confirmed that OCERS views November as a clock reset.

"That's new elective office, so he [Nelson] has the opportunity to opt out of OCERs again," Wyne said. "Each new election to the office is a new period of time that you have to opt in or out of OCERS."

And, even if Nelson were to lose, state law would still offer him a chance to opt out of the system within 60 days of leaving office.



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