By Wes Venteicher
March 04, 2019 10:16 AM,
Updated March 04, 2019 06:47 PM
The California Supreme Court on Monday upheld a pension law that stripped a retirement perk from public employees, issuing a narrow ruling that sidestepped a bigger question about whether employers can reduce pension benefits for current workers.
The court held that the perk at issue in the case was distinct from an employee’s core pension rights, such as the formula used to calculate retirement income, and not protected by the state constitution.
Therefore the benefit could be “altered or eliminated at the discretion of the Legislature,” the court ruled.
The case, Cal Fire Local 2881 vs. CalPERS, was seen as a test of the legal precedents known as the “California Rule” that have prevented government agencies from reducing promised pension benefits for decades.
Both unions and government agencies in court briefs cast the fight as a challenge to the California Rule. Unions argued benefits could not be withdrawn unless workers receive new compensation; government agencies countered that they need flexibility to manage their budgets.
The court stressed that its decision did not address the California Rule. Instead, the court limited its decision to a perquisite known as air time that government agencies offered until 2013.
“We have no occasion in this decision to address, let alone to alter, the continued application of the California Rule,” the court said in the decision.
The case turned on a challenge to former Gov. Jerry Brown’s 2012 pension law. The law, passed in the Great Recession amid concern about mounting pension debts, required public employees hired after Jan. 1, 2013 to kick in more money to fund their pensions. It also capped the amount of money they could earn in retirement.