CalMatters
By Adam Ashton, CalMatters
A California Supreme Court decision three years ago was supposed to be the final word on former Gov. Jerry Brown’s marquee pension limit law, but judges are still sorting it out — and making decisions that could mean thousands of dollars a year to government retirees.
Last [month] a state appeals court affirmed a Ventura County Employees’ Retirement Association’s decision undoing a perk that had allowed government workers to increase their pensions in a way banned by Brown’s 2013 law.
The changes add up. Ventura’s retirement fund has estimated that some retirees could lose a couple hundred dollars a month once it complies with the pension law and begins adjusting its vacation “cashout” policy and striking some other incentives, according to the Ventura County Star.
Some of those affected retirees are urging the pension board to instead apply the new rules only to people who left civil service after 2020 — when the state Supreme Court upheld Brown’s law — rather than when the law itself took effect a decade ago. That’s in keeping with policies several other retirement boards have adopted.
“This can be the difference between whether they eat or pay a utility bill or purchase a prescription they need,” Tracey Pirie, a retired Ventura County Sheriff’s Department manager, told the board that oversees her pension fund earlier this week.
When the California Supreme Court upheld Brown’s Public Employees’ Pension Reform Act in July of 2020, it directed the state’s 20 county-run pension funds to comply with it. The law reduced the potential retirement income of government employees hired after 2013 by changing pension formulas. It also restricted a variety of financial incentives that had counted toward workers’ pensions, including standby pay and large amounts of accrued vacation.
Since the 2020 decision, county funds have been recalculating how much they owe members whose pensions were calculated with the incentives that Brown’s law capped.
The process proved to be exceedingly complex. Pension funds in Sacramento and Los Angeles counties, for instance, this month reported they’re still making adjustments. In some cases, retirees are getting money back because they paid into the system for benefits they won’t receive.
Leave cashouts in California pensions
The Ventura case at the 2nd District Court of Appeals turned on a narrow question: How many hours of leave could employees cash out in their final years on the job and apply toward the formula that determines their monthly pension income.
The 2013 law caps that amount at the number of hours an employee accrues in one year and is permitted to cash out. For instance, employees who accrue 200 hours of leave in one year could cash out that amount of time and apply the extra income toward their pension if their contract allows it.
Until 2020, the Ventura fund permitted workers to choose a 12- or 36-month period to calculate their average income. Those dates did not have to align with a calendar year, and an employee over a 12-month period could cash out unused hours of personal leave in amounts that exceeded a single year’s vacation buydown allowance.
The appeals court upheld the Ventura retirement fund’s decision to prohibit such “straddling. — or, as the Ventura retirement fund’s attorney Ashley Dunning labeled it, “pension spiking.”
A group of retirees sought to retain the previous policy, arguing that Ventura County’s leave cashout policies were already more stringent than state law allows. For instance, the lawsuit named retired Ventura County Counsel Leroy Smith, who accrued 368 hours of leave each year. The county capped his pensionable leave cashout at 200 hours in one year, which was far less than the time off he accrued every year.
David Mastagni, a Sacramento lawyer who represents public safety unions and argued on their behalf in the 2020 pension case at the California Supreme Court, characterized the appeals court ruling as narrow. He said several other disputes are unfolding around the state on similarly niche questions.
He also said current employees could bargain to lift the amount of hours they can cashout in a single year, which would create a situation in which someone like Smith could have counted more hours toward his pension formula.
“The ironic thing is if in their next contract the union negotiates that they can cash out an additional 40 hours per year, then it’s going to be perfectly legal,” he said.
This article was originally published by CalMatters.
I am a retired public service employee. I was always offended by the tricks allowed certain workers, especially those in law enforcement/probation who regularly retired with salaries greater than their employee pay itself! I really doubt that the crocodile tears being shed by the retired Ventura County sheriff are real. No one in law enforcement with a retirement plan is unable to pay for basics! And most retire at a very youthful age and have the health and time left to find other employment. Some of these folks get hired by other departments and double dip or triple dip. Setting reasonable limits on this is needed to protect the retirement system for those who actually have no other option and who retire at a suitable age.
See comment above. Median pay for all retirees with a full career is $103,378. VCERA does not provide job title information with it’s data so no way to separate out public safety employees, however we have never seen a pension system that does not have higher levels of pension payments for public safety than for “miscellaneous” employees, meaning the number is likely above $103K/year for them.
Todd, see my various questions below. You’ve been called out numerous times on this site but yet here you are still!
LEOs mostly retire in Idaho and other cheap, conservative states anyway. (So many cops retire in Idaho they call it “blue heaven.” I doubt any of them are hurting for income.
I bet that a lot of us in the private sector would like to have such lucrative pension rules like that. Adding benefits to their salaries to get more retirement pay is like the cherries on top of the cake.
See comments above regarding actual pension levels for retirees.
Todd, see my comment below asking why an Oceanside resident is spending time on a Santa Barbara website.
When Ms. Pirie tells the board ““This can be the difference between whether they eat or pay a utility bill or purchase a prescription they need”, I trust she’s aware of what the actual data shows for pension levels?
According to 2022 data provided to Transparent California by the VCERA system under a public records act request, the median total pension of a retiree with a full career (30 years) was $103,378.
I’m sure having income go down “a couple hundred dollars a month” is not pleasant, but it’s hard to see how that would result in someone making $103K/year having difficulty eating or paying a utility bill.
For full data on pension levels https://transparentcalifornia.com/pensions/2022/ventura-county-pension/
Neither transparent, nor California.
“Transparent California” is just one of the many names used by the tax-exempt “free-market think tank” Nevada Policy Research Institute (NPRI). NPRI refuses to divulge its own funding sources, stating, “NPRI respects the privacy of our donors, which includes the amount of a donor’s gift”.
NPRI’s primary funding source, as determined by The Conservative Transparency Project, is Donors Capital Fund, a dark-money source of funding for conservative groups. Its donors also include The Cato Institute, co-founded by the Koch brothers, and organizations affiliated with the climate change denial movement.
NPRI spends 75% of its revenue on six-figure salaries and benefits. Its goal is to undermine support for employee unions nationwide, thereby decreasing salaries and increasing corporate profits.
Todd, is there no edhat equivalent in Oceanside? Why are you concerning yourself with Santa Barbara? Is this some collaboration with the MAGA dumdums at Fair Education or do you spend all your time on community websites throughout California promoting non-transparent data?
Speaking of “what the actual data shows”, your comment implies that the median pension, assuming we accept it as accurate, is what everyone receives, so we should waste no sympathy for any retirees’ financial hardship. It should be pretty obvious that roughly half are receiving less than the median. I can verify that my pension, after teaching for 30 years in SBUnified District, is considerably less, in fact my salary never even reached the amount you quote.