For years state and local officials have been reluctant to disclose pension information about recipients. In more and more cases this results in lawsuits demanding the release of this information given that there is no legal basis for protecting it from the public. The primary issue circles around growing public scrutiny of public-sector pensions and how local and state tax dollars are spent in light of budget shortfalls and service cutbacks.

The California Foundation for Fiscal Responsibility is a group that advocates cutting back pension benefits and recently sued the San Diego retirement fund when its operating officials refused to disclose the names of retirees collecting annual pensions of $100,000 or more. Even though other counties in the Golden State have readily released such information, San Diego has steadfastly refused to do so contending that state law precludes it from doing so yet no specific law has ever been cited by the courts. The executive director of the retirement system bases his position on the possibility that disclosure of this information could leave retirees open to identify theft or other types of fraud.

A conservative group in New York, the Manhattan Institute Empire Center, has recently become active filing legal actions against both the city's firefighters and police retirement systems. Pension fund administrators make arguments similar to those put forth by the County of San Diego relative to legal protection as well as invasion of privacy. These two lawsuits are in the early stages and may be affected by how other pension plans respond to comparable requests.

The primary legal issue behind disclosure in these cases is that the public has a right to know how their tax dollars are spent and how the pension plan fundamentally operates. Advocates of disclosure argue that pension funds are hiding behind legal arguments in order to avoid scrutiny in the press that would most certainly raise public discontent. For example, last summer in a California town, information was disclosed that revealed the city's chief working administrator was earning almost $800,000 annually. At that rate of compensation for an expected work career his pension would work out to be almost $600,000 a year. Several months later he resigned his position and an administrative hold was placed on his pension pending a more complete investigation.

Another reason that organizations have been so active in their efforts to have pension and salary information disclosed is that numerous examples of misuse of public monies are being discovered as the shield of secrecy is peeled back. One example occurred in California by a similar organization that discovered a convicted murderer who had served fourteen years in prison, retired at the age of 36 as a city trash collector, and received monthly disability checks exceeding $1,600. Figuring a generous timeline, he had to go to prison by the age of 18, finish his 14 years of jail by the age of 32, and then work for the City of Los Angeles for at least 4 years before having his disability payments vest at the age of 36. On its face this appears to be a very questionable case, exactly the sort that full disclosure was designed to both reveal and require some explanation.

In Ohio eight newspapers formed a coalition and requested pension information about several unnamed individuals. The Ohio Public Employees Retirement System denied the request based on privacy grounds. North Carolina represents a clear-cut exception to these struggles to hide public employee payments as all such payments are a matter of public record.

Clearly, the standoff between accountability versus privacy is a serious one that will not be resolved anytime soon. The key question is: When does it cease being the public's money, and when does it start being the retiree's or employee's money? State courts across the country have dealt with this question and only those states that maintain open records laws have avoided litigation trying to answer these questions.

Jack E. Karns is a professor of business law in the College of Business at East Carolina University.