In Alameda County Deputy Sheriff’s Association v. Alameda County Employees’ Retirement Association, the Supreme Court today for the second time upheld the constitutionality of statutory changes limiting the ability of those public employees who started their jobs before the changes to increase their pension benefits. But it rejected calls to ditch the “California Rule,” which requires that adverse effects on pension rights be offset by comparable positive effects, unless not enacting those positive effects “ ‘bear[s] some material relation to the theory of a pension system and its successful operation.’ ” Instead, the court found the changes didn’t violate the California Rule.
Last year, the court approved a provision in the Public Employees’ Pension Reform Act of 2013 that eliminated a statutory “air time” provision, which had allowed employees to pay to increase the length of their employment for retirement benefit calculation purposes without working the additional time. Today, the court’s unanimous 90-page opinion by Chief Justice Tani Cantil-Sakauye validates PEPRA provisions that exclude from an employee’s compensation — the basis for determining their pension benefits — amounts the local retirement board concludes were paid to enhance a retirement benefit and amounts paid for services rendered outside normal working hours.
The court says that the provisions, aimed at preventing what’s called pension spiking, “were enacted for the constitutionally permissible purpose of closing loopholes and preventing abuse of the pension system in a manner consistent with [the pension law’s] preexisting structure.”
Justice Mariano-Florentino Cuéllar signs the court’s opinion, but writes a short concurrence to stress the opinion’s limited nature.
The court reverses the First District, Division Four, Court of Appeal. It also disapproves language in a 1983 decision by the First, District, Division Two.
See coverage of the opinion in the San Francisco Chronicle, the Los Angeles Times, and the Sacramento Bee.