The California Supreme Court has recently decided to revisit a case that challenges retirement reforms that were approved by state lawmakers over a decade ago. This marks the return of pension spiking questions to the high court after a 2020 ruling on a similar case in Alameda County.
The case in question, Ventura County Employees’ Retirement Association v. Criminal Justice Attorney’s Association of Ventura County, brings up the issue of whether unused vacation cash-outs that span across multiple years can be excluded when calculating retirement benefits. The Santa Barbara County Superior Court initially ruled in favor of VCERA, a decision that was later upheld by the California Second District Court of Appeal. The California Supreme Court has agreed to hear the case, with oral arguments scheduled for November 9th.
The appeals court judges highlighted that designating a final average compensation period that straddles multiple years for the purpose of receiving compensation for leave cash-outs exceeding certain amounts goes against the intentions of the Public Employees’ Pension Reform Act of 2013 (PEPRA). This act sought to eliminate manipulations of retirement benefits, especially in the wake of the 2008 economic crash that led to significant pension reform attempts at local government levels.
Public employees’ retirement benefits are typically calculated using either the last year or the prior three years of work, depending on the employee’s tier. With the introduction of PEPRA and subsequent court rulings, there have been efforts to address pension spiking and ensure the constitutional changes to retirement laws are implemented uniformly across California’s varied county retirement systems.
Following the 2020 ruling on pension reforms in Alameda County, the California Supreme Court’s decision to hear the Ventura County case has surprised many in the county retirement system community. This case could potentially have far-reaching implications for how retirement benefits are calculated and administered moving forward. It underscores the ongoing challenges and debates surrounding public pensions and the need for clarity in regulations governing these benefits.
As the California Supreme Court prepares to review the case on retirement reforms and pension calculations, the outcome could have a significant impact on public employee retirement benefits across the state. The ongoing discussions and legal battles surrounding pension spiking and the implementation of pension reforms highlight the complexities and controversies inherent in managing public pension systems. It remains to be seen how the court will rule on the Ventura County case and what implications it will have for the future of retirement benefits in California.