Daily Journal highlighted Nossaman partners Ashley Dunning and Alex Westerfield’s California Supreme Court win for the Ventura County Employees’ Retirement Association (VCERA). In its article, “State high court clarifies limits on leave cashouts in public pension calculations” (subscription required), Daily Journal noted, “[The] California Supreme Court unanimously ruled that public employees cannot use leave cashouts exceeding annual limits to boost their retirement benefits…and that writing for the court, Justice Leondra R. Kruger affirmed calculations for pension compensation must exclude excess leave payouts, reinforcing state laws against pension spiking.” The case is Ventura County Employees’ Retirement Association v. Criminal Justice Attorneys Association of Ventura County et al.
The ruling follows a 2020 decision made by the Court and clarifies how a state law—The Public Employees’ Pension Reform Act of 2013 (PEPRA)—limits employing cashed-out leave in calculations regarding pension benefits for public employees. In the 2020 decision, the Court upheld PEPRA in relation to a case filed by the Alameda County Deputy Sheriffs Association against the county’s retirement association. After that ruling, VCERA implemented a resolution excluding compensation for accrued but unused annual leave exceeding an employee’s annual calendar-year allowance. VCERA then filed suit seeking a judicial declaration that its action was lawful.
The trial court and the 2nd District Court of Appeal upheld the resolution, but a former Ventura County Counsel employee sought additional retirement benefits by cashing out 40 extra hours of leave and two employee associations—the Criminal Justice Attorneys Association of Ventura County and the Ventura County Professional Peace Officers’ Association—unsuccessfully appealed the ruling, and VCERA prevailed in the California Supreme Court.
Daily Journal noted that in their victorious argument for VCERA, Ashley and Alex wrote the Alameda County decision makes clear how the statute should be interpreted. “Allowing employees who cashed out the same amount of leave per year to receive different retirement benefits simply because one designated a straddled FAC Period and one designated a calendar year FAC Period would undermine the normalizing intent of subdivision.”