Convicted official: $425,000 pension cut is 'elder abuse'

By msnbc.com staff and news services

A small town official convicted of misappropriating $60,000 for golf and massages says he'll fight the move by California's public employee pension fund to reduce his annual pension by $425,000 -- arguing it's "elder abuse."

"This is clearly a case of elder abuse," Bruce Malkenhorst, 77, told the Orange County Register. "I?m from an era where you made as much as you?could for as long as you could."

The California Public Employees' Retirement System said this week that Malkenhorst, who had been the city manager for Vernon, would now receive $9,654 a month, after the pension fund preliminarily concluded that his $45,073 a month pension was "illegally based on unpublished pay rates, overtime and an inflated longevity allowance."

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That's $115,848 a year instead of some $540,000.

The fund, known as Calpers, said Malkenhorst's new pension would go into effect unless he provided documentation justifying his previous retirement payments from Vernon, which were the largest in the state's history.

"Vernon's reporting and documentation has failed to comply with the legal requirements necessary to justify these payments," Calpers Chief Executive Officer Anne Stausboll said in the statement.?"We fully intend to pursue recovery of all overpayments where we can."?

Calpers said it would also deny six other Vernon officials all or part of their pensions on similar grounds.

Vernon is a tiny industrial town near Los Angeles with a population of just over 100, which has for years been the focus of investigations regarding misappropriation of public funds and voter fraud.

Similar scandals have engulfed the neighboring town of Bell and provoked widespread public outrage.

Malkenhorst, who earned $600,000 a year before his conviction, pleaded guilty last year to misappropriating public funds. He was ordered to repay $60,000 as well as a $10,000 fine, and did not received prison time.

Reuters contributed to this report.

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