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California Supreme Court will Hear Oral Arguments Remotely in Pension Reform Case on May 5

April 29, 2020
The California Supreme Court announced that it will hear oral arguments on May 5 in the appeal of the case of Alameda County Deputy Sheriff’s Association v. Alameda County Employees’ Retirement Association
The Alameda County case is one of a number of cases still pending on the Court’s docket which challenge certain aspects of the Public Employees’ Pension Reform Act of 2013 (PEPRA). 

Last year, the Court decided the case of Cal Fire Local 2881 v. California Public Employees’ Retirement System. The Cal Fire case involved a challenge to the provision of PEPRA that eliminated the option for employees enrolled in CalPERS to purchase up to five years of service credit (commonly known as airtime) to add to their pension benefit. The union argued that employees who were employed prior to PEPRA obtained a vested — and therefore constitutionally-protected — contractual right to the airtime benefit. Based on the what is commonly referred to as the “California rule” of pension benefits, which effectively prevents modification of vested pension benefits except in very limited circumstances, the union argued those employees’ right to the airtime benefit was improperly eliminated.

Ultimately, the Court ruled that airtime was not a vested pension benefit for various reasons, including the fact that it could not be considered “deferred compensation” for actual public service. After concluding the airtime benefit was not vested, the Court had no reason to consider or address the California rule or the circumstances under which a vested benefit can be modified. 

It’s possible the Court could address the California rule in the Alameda County case — however, it’s also possible the Court will not address the issue again, because the Alameda County case — like the Cal Fire case — turns on an initial determination of whether the benefits at issue are “vested.” Indeed, the League argued in a friend-of-the-court brief that the benefits in the Alameda County case are not vested.

At issue in the Alameda County case is PEPRA’s change to the definition of “compensation earnable” under the County Employees Retirement Law of 1937. “Compensation earnable” is the amount of salary that is used to calculate pension benefits at retirement. PEPRA amended the definition of “compensation earnable” to exclude certain pension-enhancing pay items, such as leave cash-outs and on-call and standby pay. Employees and employee organizations from various counties sued, claiming that PEPRA’s changes to the definition of “compensation earnable” cannot be applied to employees who were employed prior to PEPRA, because they have a vested contractual right to have their pension benefits determined based on the prior definitions.

In light of the COVID-19 pandemic, counsel in the case will deliver oral argument remotely through electronic means such as video or teleconferencing. Up to five Justices and up to 15 members of the press will be permitted in the courtroom, subject to appropriate social distancing requirements. Because of space limitations, no public seating will be available, but the argument will be available via live-stream on the Court’s website. The Alameda County case is the second case on the Court’s morning oral argument calendar beginning at 9 a.m. on May 5.

Under the California Rules of Court, once oral argument is held and the Court takes the case under submission, it has 90 days within which to issue an opinion. 

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