This Spring has seen a non-stop whirlwind of vested rights cases and CalPERS issues at RPLG. The firm was selected by the League of California Cities to draft its amicus curiae brief in Cal. Fire Local 2881 v. CalPERS (2016) 7 Cal.App.5th 115 now pending before the California Supreme Court. You can access a copy of the brief here.
Cal Fire and related cases pending before the Supreme Court provide what may be a once-in-a-generation opportunity to convince the Court to clarify the application of the vested rights doctrine to not-yet-earned (prospective) benefits of current employees. The common understanding of the so-call “California Rule” is that such benefits are largely locked-in because every change that reduces benefits must be accompanied by a “comparable” new advantage. The brief argues that the common understanding of the rule misapprehends the Court’s prior cases, which emphasize the need to treat unearned pension benefits flexibly, in accord with changing conditions, in order to keep pace with unforeseen advantages and burdens. The League brief also asks the Court to confirm that there can be no vested rights without “unmistakable” legislative intent of the intention to vest a benefit in perpetuity.
RSHS, on behalf of the Central Contra Costa Sanitary District, also drafted a Petition for Review in Alameda Deputy Sheriffs’ Assn., et al. v. Alameda County Employees’ Retirement Assn, et al. (2018) 19 Cal.App.5th 61, 227 Cal.Rptr.3d. While the Alameda Court also concluded that pension benefits for current employees were subject to change without the need for a comparable new advantage for any disadvantage, it ultimately concluded the benefit at issue there – including multiple years of leave pay-outs in pensionable final compensation – could not be changed. The appeals court also set a nearly insurmountable standard for altering benefits due to financial concerns, suggesting that to do so required that the pension system itself needed to be on the very of bankruptcy. A copy of the Petition for Review is here. The Supreme Court granted review of the Alameda case in March. Opening briefs will be filed on May 4, 2018. At this point, it appears that the Court will hear the Cal Fire case first.
Finally, the introduction of AB 1912 has rocked our world. The bill, which is an over-reaction by CalPERS to the collapse of a few joint powers authorities as funding dried up, would impose joint and several liability for all retirement-related obligations on all JPA member agencies. Strikingly, that obligation would not only be prospective, but would apply retroactively. The bill is truly a JPA killer, at the precise time that public agencies need JPAs the most in order to reduce duplication, unnecessary costs, and to promote regionalization. RPLG is working with the League of Cities on legal issues pertaining to this bill, in the hopes that a more workable solution can be found.
A busy spring….
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