Appellate court says stripping retired fire chief’s pension was ‘abuse of discretion’

A state appeals court this week overturned a lower court ruling, paving the way for a retired fire chief in the East Bay to recoup close to $1.5 million stripped from his pension by an organization that provides retirement benefits for county employees.

The Contra Costa County Employees’ Retirement Association board had alleged that former Moraga-Orinda Fire District Chief Peter Nowicki improperly calculated his pension prior to his retirement from the district. It ordered him to repay more than a half million dollars in agency overpayments and lowered his monthly pension by nearly $6,000.

The state’s First District Court of Appeal said in its decision Tuesday:

“Because we conclude the board’s decision to reduce Nowicki’s retirement allowance was an abuse of discretion, we shall reverse the judgment.” 

Nowicki retired from MOFD in 2008 with a $20,448 monthly pension, which Contra Costa County officials decried as outrageous since the pension amount exceeded the chief’s salary. The case made national news, with Nowicki becoming somewhat of a poster child for pension abuse.

In 2014, the CCCERA board sent Nowicki a letter informing him that it had been reviewing past incidents of unusual compensation increases at the end of employment to determine if pension spiking had occurred “through members’ receipt of pay items that were not earned as part of their regularly recurring employment compensation during their careers.”

After a 2015 hearing, CCCERA determined that Nowicki had improperly calculated his pension, and the agency lowered his pension to $14,668 per month and demanded that Nowicki return $585,000 in overpayments.

The chief sued the retirement board and in 2020 a Contra Costa County Superior Court judge affirmed the action of the CCCERA board to strip Nowicki of part of his pension. Nowicki appealed the Superior Court decision, and a three-judge panel heard his appeal in San Francisco in June.

All along, Nowicki has maintained that he did nothing wrong, and said when calculating his pension that he followed the retirement association’s rules, which allowed the chief to sell back vacation leave, administrative leave and holiday pay to count toward his retirement payout.

Harvey Leiderman, fiduciary attorney for CCCERA, disagreed.

Leiderman said in 2015:

“We have the authority to correct errors if the member improperly caused the benefit to be increased or overstated at the time of retirement. … There is no question the member actively engineered these retroactive benefits.”

Though the appellate court stated that “Nowicki’s pre-retirement efforts to increase his compensation earnable in the period before his retirement, which allowed him to maximize his pension, epitomize pension spiking,” it determined that way the chief calculated his pension “fell in conformity with the spirit of the law.”

Nowicki said he felt vindicated by the appellate court decision.

Nowicki said:

“It’s unfortunate that a retiree has to waste six years of their life embroiled in the legal system just to protect the benefits they earned over three decades of dedicated work.”

He added:

“The Contra Costa Retirement Board needs to realize that fruitless witch hunts have real life consequences that affect people’s lives.”

Neither Leiderman nor Scott Gordon, CCCERA board chair, responded to a request for comment.

Steve Kaiser, Nowicki’s lawyer, said:

“After years of litigation, our client Pete Nowicki got the result he was entitled to: reversal of an unjust and legally incorrect decision by the Contra Costa County Employees’ Retirement Association stripping him of his hard earned retirement. … We at Messing Adam & Jasmine are delighted that the First District Court of Appeal corrected this injustice in a way that is of immense value not just to our client, but hopefully to others who retired before (new regulations) came into effect in 2013.”

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