Ongoing Pension Battle: California Judges Grapple with Implications of Jerry Brown’s Law
Pension limit law continues to provoke legal disputes
Three years after a California Supreme Court decision intended to settle the matter, former Gov. Jerry Brown's pension limit law continues to provoke legal disputes and decisions that could impact thousands of dollars annually for government retirees.
In a recent development, a state appeals court affirmed the decision of the Ventura County Employees’ Retirement Association, undoing a benefit that allowed government workers to enhance their pensions in a manner prohibited by Brown’s 2013 law.
The financial implications are significant, with Ventura's retirement fund estimating that some retirees might experience a reduction of a couple of hundred dollars per month as it adjusts its vacation "cashout" policy and eliminates certain incentives in compliance with the pension law.
Aligning with the State Supreme Court
Effected retirees are urging the pension board to apply the new rules only to individuals who departed civil service after 2020, aligning with the State Supreme Court's 2020 decision upholding Brown’s law, rather than when the law originally took effect a decade ago. Similar policies have been adopted by several other retirement boards.
For retirees like Tracey Pirie, a retired Ventura County Sheriff’s Department manager, the stakes are high. She emphasized, “This can be the difference between whether they eat or pay a utility bill or purchase a prescription they need.”
Public Employees’ Pension Reform Act
The California Supreme Court's 2020 decision upheld Brown’s Public Employees’ Pension Reform Act, directing the state's 20 county-run pension funds to adhere to the law. The act reduced potential retirement income for government employees hired after 2013 by altering pension formulas and restricting various financial incentives, such as standby pay and accrued vacation.
Since the 2020 decision, county funds have been recalculating pension amounts, creating a complex process. Counties like Sacramento and Los Angeles reported this month that they are still making adjustments, with some retirees receiving reimbursements due to overpaid contributions.
Pension fund's decision
The Ventura case at the 2nd District Court of Appeals centered on the question of how many hours of leave employees could cash out in their final years on the job and apply toward the pension formula. The appeals court upheld the Ventura retirement fund’s decision to prohibit "straddling" or "pension spiking."
Retirees argued to retain the previous policy, asserting that Ventura County’s leave cashout policies were stricter than state law allows. However, the court ruled in favor of the pension fund's decision.
Legal expert David Mastagni, who represented public safety unions in the 2020 pension case, described the ruling as narrow. He noted that similar disputes are unfolding across the state on specific questions, highlighting the potential for unions to negotiate changes to cashout policies in future contracts.