Estate planning and retirement planning should be carefully thought out and well-executed activities. They prepare us for our senior years, or for unforeseen circumstances. That planning took a strange turn in Oxnard, according to news sources.
Apparently the city of Oxnard retired department heads were the benefits of a monthly retirement gift that was not approved by the city council. The monthly transfer of funds was deemed illegal by one councilmember. Any retirement planning or estate planning device should always, of course, be legal. The council is calling the unauthorized benefit a supplemental post-retirement benefit.
It was not stated how the issue came to the attention of the current Oxnard city council, but the alleged retirement perk was created by a city manager, who has since been suspended.
According to news sources, six retired employees are receiving $300 per month from the program which began in 2008.
The discussion by the council covered several potential issues with the retirement perk. The mayor mentioned that it is the city manager’s right to set the pay for city employees. Another member thought the amount was acceptable considering that raises had not been offered in a few years. One councilmember thought the perk looks illegal.
There are a host of issues surrounding this unauthorized retirement benefit. If it is illegal, was a crime committed? Should the program be modified or halted entirely? Does it make a difference that these retired city employees were paid with taxpayer money? Does the benefit constitute a gift, and if so, is a gift tax owed? Should the money be returned?
News sources seem to indicate that this particular retirement plan will be retired. The Oxnard city council will have many issues to sort through as it attempts to make the issue right for all involved.
This makes clear the benefit of obtaining legal advice when involved with retirement or estate planning investments or decisions.
Source: VCStar.com, “Retirement perk for Oxnard heads could be on its way out,” Gretchen Wenner, April 18, 2012