On the eve of the California state legislature passing a new bill to create a pension for MMA fighters, Melody Gutierrez at The Los Angeles Times dropped a giant stink bomb on the proceedings.

Her article, focusing on the outright financial confusion surrounding California’s boxing pension fund, has reinvigorated scrutiny about how much money the state Athletic Commission has distributed and why the math doesn’t seem to add up. The LA Times article should be considered a preview of coming attractions for those who have dreams and aspirations of a fully functional MMA state fighter pension.

The LA Times article has rattled political cages in Sacramento. Andy Foster, the decade-long Executive Officer for the Athletic Commission, is profiled as the key figure in the story. What’s far more interesting is who the Times didn’t mention in regards to the controversy surrounding the boxing pension.

A key player in the story, with little public fanfare, has managed to utilize his Athletic Commission resumè to obtain one of the most powerful state attorney jobs. How powerful? The job involves giving legal advice to someone in control of an estimated $100 billion dollar state portfolio.

How did this happen? And why aren’t government employees, along with state political & legal reporters, willing to go on the record to talk about it?

History of California’s boxing pension fund

In 1981, the state of California created a boxing pension fund (Business and Professions Code statute 18880). The legislative intent of the pension was to create a subsidy to help support retired boxers over the age of 50. Many of the pensioners automatically fall under the category of at least one legally protected class: age, race, gender, and disability.

A complex calculation was created to determine who could get paid and how much. A simpler calculation was created to help finance the pension fund. A portion of each boxing ticket sold in California would help fund the pension. That percentage would be adjusted upwards based on the Consumer Price Index. The last reported adjustment was in 1999 at 88 cents a ticket. A hard cap of $4,600 was instituted for each event.

Pensioners, after turning age 50, have three years to sign paperwork to claim their distribution. If they don’t file a claim after 3 years of eligibility, then they are placed into reserve status.

Boxers who collected pension distributions before 1999 were statutorily assigned accrued distributions with a 6% interest rate.

The structure of the pension is two-fold: there’s an investment trust (Boxer Pension Investment Account) and then there’s the state fund account (Boxer Pension Fund). Money is transferred from the investment account to the state fund account. If someone doesn’t claim a distribution within three years, a reserve is established.

A growing pile of cash unclaimed

At its core, a pension is a trust and the trustee is the state agency that oversees it. In this case, it is the California State Athletic Commission that is controlled by the Department of Consumer Affairs. The Athletic Commission has an annual budget of two million dollars. Consumer Affairs has an annual budget of over $600 million dollars.

A state boxing pension fund was created to be managed by state employees, who may or may not be financial or legal professionals. That is where the system immediately began to fail.

Millions of dollars have accumulated inside of the pension fund because most eligible retirees had no clue that a pension ever existed. Because the pension is not a private business plan, it doesn’t have the protections of ERISA. Since licensees in California are considered independent contractors and not employees, pensioners don’t have the same automatic protections like public state employees do with CALPERS.

What you’re left with is a quasi-public trust guided under the principles of the Contract clause. Pensioners can file a claim for distribution but they can’t administratively challenge the value of that distribution. Since most eligible pensioners have no idea that they’re eligible for a pension distribution in the first place, money is sitting in the pension trust.

This is the financial system that California’s new MMA pension fund will be modelled after.

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Decades of administrative changes have changed nothing

If there’s one constant about the boxing pension fund, it’s the fact that administrators and figureheads come and go but financial tensions always remain. Ultimately, it’s the attorneys from Consumer Affairs who carry out the legal direction of how the Athletic Commission operates.

When Andy Foster became Executive Officer, the state paired him with an attorney who was a veteran mainstay at Consumer Affairs – Spencer Walker. Walker took the place of long-time state attorney Anita Scuri, known for her hardball legal tactics. Big shoes to fill.

Spencer Walker stepped right in and demonstrated his affinity for the media spotlight. He learned from the best that the attorneys control the action by the tone they set at meetings. Walker quickly became a fixture at Athletic Commission meetings, both in a vocal capacity and sartorially with his bow ties.

The boxing pension fund has long been a sore spot for the state of California. It’s always been considered a political hot potato. It was the subject of a high-profile Joint Legislative Audit in 2012. You can never avoid the topic at any Athletic Commission meeting and there’s a good reason for this. When you are legally classified as a trustee, you have a legal duty of loyalty and care to protect the trust. You are responsible for protecting the pensioners. As a state trustee, that responsibility dramatically increases because you have to exhaust your administrative remedies in using as many state resources as possible. The bar is set higher given the power of the State.

Despite Andy Foster’s efforts to find pensioners through private channels (such as the WBC), hundreds of pensioners – and the families of deceased pensioners — are owed a significant amount of money.

This is where law enforcement and attorneys come into play. The state owes Andy Foster a duty as the trustee to the boxing pension to give him all the resources he needs. Law enforcement agencies have access to powerful databases including DMV, NCOALink (National Change of Address), real estate records, BREEZE (state/board licenses), criminal records, social services, real estate records, skip tracers, and Consulate referrals. The two main law enforcement agencies that the Athletic Commission has access to are the Division of Investigations (DOI) and the state Department of Justice (DOJ). So, how much help has the state provided?

Monica Vargas, deputy communications director for Consumer Affairs, issued the following statement to our inquiry on the subject matter.

“Outside of open source data and public information, the California State Athletic Commission (CSAC) does not have access to databases. CSAC has used Division of Investigation resources appropriate for such a request in its effort to locate retired fighters. CSAC has not requested assistance from any other law enforcement agencies.

“In order to maintain the integrity of the Division of Investigation’s investigative resources, we have no additional details to provide outside of what was shared in the previous response.”

The LA Times article by Melody Gutierrez says Mr. Foster will soon hire a private investigator to help find pensioners.

Cracks in funding the boxing pension system

Like a water-damaged concrete basement perimeter, the current California boxing pension fund has a systemic problem in maintaining a revenue stream to keep up with eligible pensioners. A big part of the state’s historical mismanagement has to do with not following the law and not following established state policy and procedures.

The funding mechanism for the boxing trust is based on collecting ticket fees that are adjusted to the Consumer Price Index. That current fee is 88 cents a ticket. The LA Times reports that the last CPI adjustment was made in 1999. The Athletic Commission claimed that the last adjustment was in 2006. Regardless of this chronological dispute, the Athletic Commission hasn’t made a statutorily-mandated CPI adjustment in nearly two decades. By their own admission in the 2012 State Audit,, California should have collected, at a minimum, hundreds of thousands of dollars more in ticket revenue to help fund the pension.

Using a CPI Inflation Calculator, 88 cents in 2006 is equal to $1.35 in 2023. That is the minimum fee the state should be collecting from ticket sales to fund the boxing pension. The failure of the Athletic Commission to adjust fees to CPI means they’ve left a lot of money on the table. That is a breach of duty to the trust (pension).

State auditors said the commission is required by law to increase revenue for the pension based on the consumer price index. The commission concluded in the past that it must create those automatic inflation increases and attempted to pass regulations to do so. However, those efforts stalled and the commission now says it does not believe inflation increases for pension revenue are required by state law.

The Los Angeles Times

The state law never changed. The enforcement of it did. 

The failure of the state to generate enough revenue to fund the pension means an increasing risk of having a First Republic situation on your hands. The last thing you want on your watch is a massive rush of outflows. 

A warning siren blared at February 19, 2019 Athletic Commission meeting (watch video here). Beth Harrington of Benefit Resources, the third-party contractor used by the state of California to oversee the boxing pension investment trust, made some troubling comments about what would happen if a rush of pensioners came forward to collect distributions. Which lead to this exchange with Commissioner Mary Lehman:

“So, you have no legal direction?”

“I have no legal direction. I would end up going to the Commission and I’m sure I would come to you to say, here’s our challenge.”

A few seconds later, Ms. Harrington blurted out: “You make the rules!”

The state attorney representing the Athletic Commission meeting on February 19, 2019 was Spencer Walker. It would also be his last in-person meeting as attorney for the commission.

The COVID crunch on California’s fight calendar would soon exacerbate the state’s financial difficulties with the boxing pension. Three years after that fateful 2019 meeting, written minutes from the Athletic Commission’s June 2022 session revealed further deepening concerns:

“EO Foster informed the Commission that during the pandemic it became very clear that the Commission can’t rely on the two revenue streams, ticket fees of .88 cents per ticket and the investment income from Raymond James, to fund the Boxers Pension Plan. He added that when the Commission has no events, and no revenue the pension funds crash.”

There are serious reasons to worry about a run on the boxing pension. Given the formula used to calculate the value of pension distributions, it is more probable than not that those who are owed the largest distributions are prize fighters who made the most money in boxing. As The LA Times reported on May 11th, Shane Mosley just collected a $203,000 distribution. The fighters who are owed bigger distributions are most likely going to claim those distributions.

What happens if there isn’t enough money to cover distribution claims?

Unequal protection of boxing retirees

The most powerful testimony in the LA Times boxing pension article came from a journeyman named Mike Jameson. The Times article claims that an internal state valuation for Jameson’s pension distribution was $21,500 a decade ago but now it’s supposedly only worth $12,000. How does a defined-benefit pension claim that a distribution has reduced in value by 45% based on solely when you file a claim? This kind of arbitrary and capricious math is ripe for a legal challenge based on the argument of an Unjust Taking.

A key paragraph from the Times article:

In the early years of the plan, unclaimed pensions were allowed to accrue interest and grow over time. But the commission determined in 2013 that was not what the plan rules intended. It then retroactively deducted the accrued interest from the accounts of dozens of boxers who hadn’t yet claimed their pension, many of whom said they were never told they had a pension in the first place.

The Los Angeles Times

What would the legal basis for not paying pensioners interest that has accrued in their trust account?

Who was giving legal advice to the Athletic Commission in 2013? Spencer Walker.

If an attorney like Spencer Walker reduced the value of his client’s trust account by 45%, what would the State Bar say to him in a disciplinary hearing? 

The California State Bar is very clear to attorneys about the rules for managing trust accounts and awarding interest payments to clients in those trust accounts. How would that principle be any different for a state pensioner?

Bloody Elbow has reached out to Spencer Walker but received no reply.

Put yourself in the shoes of Mike Jameson. The disparity in bargaining power between a state trustee and a retired boxer over the age of 50 is massive. It’s a perfect example of a “take it or leave it” situation because the trust is a contract, the state is a party to that contract, and the pensioners have no administrative rights to dispute what the state is offering them for a distribution.

Here you have the state of California collecting property (money) on behalf of a person for a retirement pension that isn’t regulated by a normal retirement pension statute. The state takes their property, builds upon the initial value of that property, and then allegedly decides to change the interpretation of the state law that the boxer would detrimentally rely upon when receiving the distribution. How is his pension distribution worth 45% less than the distributions made by the same pension fund to other past retirees?

To read the rest of this feature, exploring the mismanagement of California’s boxing pension fund and the potential calamity that an MMA pension fund could be, go to the Bloody Elbow Substack now. This feature is available for FREE. It was funded by paid subscriptions. So if you want more longform combat sports investigation pieces, please pick up a paid subscription to our Substack. A $50 annual subscription is the best way to support Bloody Elbow’s mission to tell tough stories that powerful people don’t want told.

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About the author
Zach Arnold
Zach Arnold

Zach Arnold first started writing about combat sports in 1996. He is a veteran professional wrestling and Mixed Martial Arts writer who frequently covered both the California and Nevada athletic commissions starting in 2010. His archived writings can be found at Fight Opinion.

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