Retirement chief hangs on

County board members refuse -- by one -- to accept resignation

By Ken Carlson
kcarlson@modbee.com

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By a single vote, Tom Watson held on to his job as administrator of the Stanislaus County Employees' Retirement Association.

Little more than a week after submitting his resignation, the county retirement board voted 4-3 Wednesday not to accept it, and Watson decided to keep his job. The board discussed the personnel issue behind closed doors for an hour and 20 minutes.

Watson will continue to manage a retirement system that has suffered huge investment losses since early 2007 and angered some members with recent decisions intended to keep the pension fund solvent. StanCERA administers retirement benefits for employees of the county and other public agencies in the area.

StanCERA Web site

Before the closed session, several retirees urged Watson to stay, saying his expertise was needed during these tough times. The board members voting not to accept his resignation -- Maria De Anda, Darin Gharat, Wes Hall and Clarence Willmon -- were put on the board to represent public sector employees or retirees.

Watson didn't get a vote of confidence from Jim DeMartini, chairman of the county Board of Supervisors and a board member; Mike Lynch, a county appointee; and Gordon Ford, the county treasurer-tax collector and retirement board chairman. Ron Martin and Mike Fisher, two other board members appointed by the Board of Supervisors, were absent.

Watson submitted a letter of resignation June 1, along with a letter apologizing for making mistakes that he said had embarrassed the association. His resignation was to be effective Wednesday if the board accepted it, his letter said.

Comments kept short

Watson declined to comment after the closed session, and the board members who voted not to accept his resignation were tight-lipped, saying it was a personnel issue.

"I think Tom is doing a great job," Hall said, declining to comment further.

De Anda said simply, "I am glad that Tom is staying."

Ford said after the meeting he had no problem with Watson continuing as administrator. "I had a problem with the way it was done," he said. "I didn't agree with the concept of a (resignation) and then rescinding it."

DeMartini believes the retirement system needs a new administrator. "I am not satisfied for a long list of reasons," he said. "I don't think the board has been kept informed on a variety of issues."

In recent months, county leaders became more assertive about pension fund business after learning its contribution to the system could increase by $22.7 million for 2009-10. The county is obligated to increase its contribution if investment earnings fall short. With the county facing a $34 million budget deficit, the retirement board agreed in April to take $60 million from nonvested benefit reserves to reduce the county's obligation.

Watson continued to receive flak from DeMartini at the board's May 26 meeting. He has charged that Watson held inappropriate meetings with retiree representatives and failed to invest $20 million to take advantage of the recent stock market rebound.

"It could have been done earlier," Watson acknowledged at Wednesday's meeting. "My mistake. My error."

A number of retirees praised Watson for his years of service to StanCERA. He has served as administrator since early 2005 and also worked with the retirement system when he was the county treasurer-tax collector for 10 years.

"We would hate to see this board and this county lose him as a resource," said Michael O'Neal, president of the Retired Employees of Stanislaus County.

Bee staff writer Ken Carlson can be reached at kcarlson@modbee.com or 578-2321.