An investigation has revealed that former Bell City Manager Robert Rizzo awarded disability pensions inappropriately to some of the top officials in the police department. Three former chiefs were all approved for disability pensions, which are taxed at a lower rate and thereby grant far more generous payments to retirees.
In all, an investigation into the disability pensions found that 7 of 13 cases were awarded inappropriately, and the matter has been referred to CalPERS for additional investigations. The IRS is also looking into the payments, because it appears that worker’s compensation settlements also included unused vacation time and sick leave. That would be a violation of tax law.
It appears that the workers comp payments and disability pensions were used to either buy officers out of the police force or reward officers who were in Rizzos favor.
From the Los Angeles Times:
More than half of the disability retirements awarded to police officers under former Bell City Administrator Robert Rizzo — including those given to three police chiefs — should not have been granted, and workers’ compensation settlements for 13 officers were “exceedingly large,” an investigation has concluded.
As a result of those awards, the officers could receive millions of dollars in extra benefits. The advantage of a disability retirement is that only half of the pension is taxed; workers’ compensation settlements are tax free.
Read the full article here.