California Supreme Court to Review Pension Reform Issues

The California Supreme Court has granted the review of a case challenging retirement reforms that state lawmakers passed 11 years ago, marking a return of questions about pension increases to the high court for the first time since a 2020 ruling on an Alameda County case .

The new case, Ventura County Employees Retirement Association v. Ventura County Criminal Justice Bar Association, raises the question of whether unused vacation withdrawals spanning multiple years could be excluded when calculating retirement benefits .

The Santa Barbara County Superior Court granted summary judgment in favor of VCERA which was later affirmed by the California Second District Court of Appeal. The Supreme Court agreed to hear the case on April 17 and scheduled oral arguments for November 9.

California Supreme Court

“Designating a final average compensation period of 12 or 36 months spanning several years to receive compensation for license withdrawals greater than the amount a member could receive in one or three calendar years, respectively, is the kind of manipulation that ( Public Employees Pension Reform Act of 2013) that was sought to be eradicated,” the appeals court judges wrote. in his failure.

Retirement benefits for public employees are calculated using the last year or three years of work, depending on the level to which the employee belongs. Many local governments created second employee pension tiers with lower benefits for new employees as part of pension reform in the years after the 2008 economic crisis, as the so-called “California Rule,” a series of cases Judicial rulings around the 1950s that established ironclad protections for public pensions make it difficult to make changes to existing employee benefits.

California courts were busy hearing challenges brought by unions and other entities for several years after the Public Employees Pension Reform Act of 2013 was passed.

The cases were followed nationally, because PEPRA was considered to present a challenge to the California Rule. Some other states have similar protections.
Ultimately, the state Supreme Court issued a narrow ruling in the case brought by the Alameda County Deputy Sheriffs Association against the county employees retirement association.

In that ruling, the court affirmed the State’s right to eliminate pension increases, a reform outlined in PEPRA.

Ashley Dunning, a Nossaman partner and lead attorney representing VCERA in the court and appeals case, called the high court’s decision to hear the case “surprising news for the California County Retirement System community,” in an email alert posted Monday.

Following the Alameda decision, numerous county retirement boards, including VCERA, took action to implement the state Supreme Court’s directive that PEPRA’s changes to the County Employees Retirement Act of 1937 must be implemented by county retirement systems, Dunning wrote. in a Nossaman e-alert from January.

The 2020 Alameda decision upheld the constitutionality of changes to CERL that were adopted in connection with the enactment of PERPA in 2013, Dunning said.