For weeks, 73-year-old Ann Jaramillo had been bracing for the decision that could redefine her golden years. It had been nearly a decade since the retired Salinas teacher found out her benefits package had been miscalculated by her school district — and nine years since CalSTRS, the teachers’ state retirement agency, told her that she owed them $75,000.

But last month, the state Supreme Court declined to review the case of Jaramillo and 27 other teachers after five years of legal back-and-forth, dashing their hopes of overcoming a bureaucratic mess that has pitted thousands of California teachers against one of the country’s largest pension funds.

“It feels like fighting a dragon with a fork,” said Jaramillo. “You might get a poke in here and there, but it doesn’t bleed, and for sure, it feels no pain.”

Jaramillo is one of 9,623 retired educators who have had their benefits reduced between 2016 and 2022, and one of many who are now paying back tens of thousands of dollars in “overpayment debt” to CalSTRS.

Ann Jaramillo, 73, a retired Salinas teacher, found out that her benefits package had been miscalculated by her school district and was told she owed them $75,000. Jaramillo is one of 9,623 retired educators who have had their benefits reduced from 2016 to 2022, and one of many who are now paying back tens of thousands of dollars in “overpayment debt” to CalSTRS. (Molly Gibbs/Monterey Herald)

Some of those overpayments came from a district miscalculation, where teachers were told the additional classes they taught would count toward their retirement. Other errors, districts say, were the result of schools receiving hazy explanations from CalSTRS on how to include bonuses when calculating retirement payouts. There were mistakes for teachers who served as union representatives, and mistakes on whether summer school teaching could be folded into retirement benefits. And while a new law prevents such miscalculations from affecting retirees in the future, it won’t help the thousands of teachers who have already been impacted.

“Retirees have literally had to pay for the mistakes that either the district or CalSTRS were making,” said Jennifer Baker, a legislative advocate at the California Retired Teachers Association. “These are individuals who did what they were supposed to do: they sat down with a CalSTRS counselor, they checked with the district to make sure that data was correct, and they retired based on the information they were given.”

In Napa, 68-year-old John Boyett is repaying $67,000 in overpayment debt. On top of that, his monthly benefits have been slashed by $1,200. In Danville, 71-year-old Stephanie Brown-Myers is paying back $22,000 and losing nearly $300 a month from her benefits. In Salinas, 78-year-old Rheta Thure — who retired in 2012 — said she’d done the math. At her current rate of repayment, she would be 106 before she could repay her whopping $142,886.44 debt.

John Boyett, 68, at his home in Napa, Calif., Tuesday, April 11, 2023, retired from the St. Helena School District in June of 2016, after meeting with CalSTRS retirement counselors and his school district to review his benefit package. Years later, he was informed there was a miscalculation. He now owes CalSTRS $67,000 of “overpayment debt.” (Karl Mondon/Bay Area News Group)

CalSTRS is the largest educator-only pension fund in the world. With a $306 billion investment portfolio, it’s also the second-largest pension fund in the country. Teachers pay into CalSTRS like they would any retirement account, with matching funds provided by the state and school districts. Each employee’s benefits package is then calculated by years worked, age and compensation. Once that number is finalized, teachers meet with their district representative and a CalSTRS agent to go over their packages.

Every year, CalSTRS said it runs about 100 audits, verifying the payroll information of school districts across the state, and ensuring taxpayer money isn’t misspent. Most of the time, audits can benefit retirees, finding they weren’t getting paid enough. But 20% of all adjustments result in a loss, according to CalSTRS data.

“I thought I’d covered all the bases,” said Boyett, the Napa retiree who is also saddled with thousands of dollars in lawyers’ fees. “I even put that in my resignation: I would retire if, and only if, what had been calculated by CalSTRS was accurate.”

Data from 2016 to 2020 showed that 5% of all retirees were affected by some sort of benefit adjustment — either positive or negative — due to employer error, late reporting, audit findings, adjustments by a retiree or some other change. Though the average monthly decrease was just $144, many teachers are facing monthly deficits 10 times larger.

In 2008, CalSTRS audited a sample of payroll records from Salinas Union High School District, where Jaramillo taught, and found that the district had overcompensated several retirees due to a “reporting error” related to teachers’ taking on an extra period — one which, according to Jaramillo, had been cleared by CalSTRS agents prior to each teachers’ retirement.

Two years later, CalSTRS directed the district to correct those errors. But Jaramillo and the other teachers in that district didn’t receive letters informing them of the cuts to their benefits until 2014 and 2015, according to the case’s court documents. By the time Jaramillo found out, she had been retired for five years.

Since then, the teachers have gone through multiple court cases — winning the first two, but ultimately losing at the appellate court, and fundamentally altering her life.

“We used to plan trips,” said Jaramillo. “We’ve quit thinking about where we might go in the limited time we have left.”

CalSTRS could not provide a breakdown of why retirees’ benefits were altered, but in an emailed statement, CalSTRS said it offers “employer education, training, and informational outreach” so districts can accurately calculate a teachers’ benefit package. Districts contacted by the Bay Area News Group either declined to comment on who made miscalculations or denied they made mistakes.

According to CalSTRS’ administrative remedy process, if a retiree disagrees with the agency’s determination, they are entitled to request an administrative hearing and a review by the Appeals Committee of the Teachers’ Retirement Board. But several retirees said they were never given the opportunity to appeal CalSTRS’ decision, despite repeated requests. Boyett said he’s been fighting for a hearing for more than two years.

“What I’ve found out over time is that STRS wears people down, to the point where most teachers have no choice but to fold,” Boyett said. “They have all the resources to do so because they are using our own contributions to fight us.”

Stephanie Brown-Myers knows that feeling intimately. Seven years after her retirement in 2013, she and 184 other retired teachers at San Ramon Valley Unified found out they had been affected by a CalSTRS audit.

The district “strongly felt it did not make an error,” said Ilana Israel Samuels, the director of communications at the district. San Ramon Valley Unified spent five years fighting against CalSTRS in court, but ultimately, the district lost the case. Brown-Myers felt she had no choice but to comply.

“If our school district, which has some 30,000 students, couldn’t win their legal battle after five years, I knew there was no way I could beat my own little drum enough for anyone to pay attention to me,” said Brown-Myers, who was notified of her reduced monthly payments and $20,000 debt years after her retirement.

Retired teachers Stephanie Brown-Myers, of Danville, left, and Georgia Moore, of Walnut Creek, are photographed at Green Valley Elementary School in Danville, Calif., on Friday, April 7, 2023. (Jose Carlos Fajardo/Bay Area News Group)

Even so, she joined a number of other retired teachers in Sacramento last summer to push for AB 1667, a bill to block CalSTRS from requiring teachers to pay for miscalculations they didn’t make.

Georgia Moore, a 74-year-old retired elementary school teacher affected by the same audit as Brown-Myers, knew that going to Sacramento wouldn’t help her own case. Moore had already paid $7,000 back to CalSTRS, as documented by her letters from the retirement agency. But still, she wanted to speak up.

“My whole intention was to try to get this passed so that future retirees won’t have to go through this,” said Moore. “They’ll never know that this saved them.”

AB 1667 passed in January. From now on, retired teachers will not be required to repay overpayments detected in audit reports released after 2023. Still, the bill is not retroactive, and cannot help teachers like Moore, Brown-Myers, Jaramillo or Boyett.

Even so, Boyett is still pushing for an appeal, and those from Salinas Unified are asking their representatives to push for a new bill making AB 1667 retroactive.

One afternoon this past winter, Jaramillo sat with 74-year-old Sandra Uecker, another Salinas teacher impacted by the audit. Uecker picked up a CalSTRS brochure, with a photograph of a retiree smiling at her from the cover.

“Here’s their tagline,” Uecker read, gesturing to the pamphlet. “How will you spend your future?”

“Fighting you,” said Jaramillo.