pensions

By Ed Mendel
Monday, June 30, 2014

An initiative that would phase out Ventura County employee pensions is headed for a court test, challenged by a union lawsuit contending the change requires state legislation.

Ventura County supervisors put the initiative on the November ballot after the required number of voter signatures were submitted. Then a board majority, who oppose the initiative, told the county counsel to back the suit to keep the initiative off the ballot.

The maneuver earlier this month sets up a court test, presumably before ballots are printed, of whether local voters can phase out the 20 county retirement systems, ranging in size from Los Angeles to Mendocino, that operate under a 1937 act.

Like an initiative approved by San Diego voters two years ago, the Ventura initiative gives new county hires a 401(k)-style individual investment plan, instead of a pension, and reduces current worker costs with a five-year freeze on pensionable pay.

The San Diego initiative exempted police, allowing new officers to receive pensions. The Ventura County initiative, backed by the county taxpayers association and others, has no exemption and would give new deputy sheriffs a 401(k)-style plan.

In the legal challenge, the key difference is that the San Diego pension plan operates under the city’s laws while the Ventura County pension plan operates under a state law.

“Because the measure proposes only a local ordinance, which cannot by law disestablish the 1937 act plan in the county, the measure is illegal and of no effect,” Leroy Smith, the Ventura County counsel, said in a 21-page analysis.

“Once accepted, the 1937 act provides no procedure by which a county can disestablish the retirement system or unaccept the retirement law by any subsequent local action, either by the voters or by the board of supervisors.”

The 1937 act provides no authority or process to withdraw from the system, Smith wrote, so the proper method to “repeal or amend a state law such as the 1937 act” is through state legislation or a statewide initiative.

David Grau, chairman of the Ventura County Taxpayers Association, said he is confident the initiative will withstand the legal challenge. “We got a legal opinion first,” he said. “That was the basic question: Can the voters change the system.”

Attorneys for the initiative backers said in a letter to Smith, responding to a union threat of a lawsuit if supervisors put the measure on the ballot, that voters can legally repeal the pension plan and replace it with a 401(k)-style plan.

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