In the first of what will likely be a series of decisions about the validity of California’s efforts to scale back future pension payouts to its employees, the Supreme Court today upholds a statute that ended one method workers were using to maximize retirement benefits. The court’s unanimous opinion in Cal Fire Local 2881 v. California Public Employees’ Retirement System, by Chief Justice Tani Cantil-Sakauye, holds the Legislature did not interfere with a contractual right when it eliminated a statutory “air time” provision, which allowed employees to pay to increase the length of their employment for retirement benefit calculation purposes without working that additional time. The court concludes that the earlier “air time” statute did not “‘clearly evince a legislative intent to create private rights of a contractual nature.’”

By concluding the ability to buy “air time” was not a contractual right, the court avoids for now addressing whether to change or get rid of what’s been called the “California Rule.” That rule — one the court recognizes got its name in part “because its breadth has not been widely adopted by other jurisdictions” — governs how, if at all, a pension provision that does confer a contractual right can be constitutionally altered.

Justice Leondra Kruger — joined by Justice Goodwin Liu — writes a separate concurrence in addition to signing the court’s opinion. She expands on “why the opportunity to purchase [‘air time’] credits was not an employment benefit that vested by implication.”

The court affirms the First District, Division Three, Court of Appeal.

See news coverage of the opinion in the San Francisco Chronicle, the Los Angeles Times, the Sacramento Bee, CALmatters, and Courthouse News Service.