During the period of 2018 to 2020, the Sacramento County Employees Retirement System (“SCERS”) adopted three policies eliminating certain benefits that sheriff deputies had been receiving for many years without providing a similar new advantage in return. Specifically, the calculation of service credit was changed from 2080 hours equals one year of service credit to one calendar year equals one year of service credit. This deprived deputies that work a regular schedule that exceeds 2080 hours a year from earning extra service credit. SCERS also implemented a policy that all deputies hired after 1/1/2013 only have a base pay calculated as part of the final highest compensation. This deprived deputies from getting increased final highest compensation due to other forms of pay like certificate pays, incentive pays, specialty pays, and shift differential. Lastly, SCERS implemented a policy that all deputies, no matter the date of hire, would not have K-9 pay calculated as part of final highest compensation.
SCERS took the position that the pension reform statutes passed into law in 2013 (“PEPRA”), along with the California Supreme Court Decision in Alameda Deputy Sheriff’s Assn. V. Alameda Cty. Employees Ret. Assn. (“Alameda”), authorize SCERS to implement policy changes that are consistent with the statutory scheme, even if the changes deprive employees of previously provided pension benefits.
On behalf of SCDSA, the Mastagni Law Firm filed a Writ of Mandate and Complaint for Declaratory Relief against SCERS. The primary argument being that pension benefits (with some narrow statutory exceptions) are a constitutionally protected interest under the contracts clause of the California Constitution. These rights cannot be impaired without providing a similar new advantage in return. This is also referred to as the California Rule and these rights have been recognized throughout the courts for more than eighty years.
SCERS filed a Demurrer asking the Court to dismiss the civil action in its entirety for failing to state a cause of action. As indicated above, SCERS argued it has the authority to make these changes post PEPRA and Alameda, and the deputies have no valid claim for the pension benefits that were taken away.
The Court denied SCERS’ Demurrer in its entirety. The court ruled that Alameda did not eliminate the California Rule and that SCERS policies and practices can still create vested pension rights. The Court held that under PEPRA and Alameda, SCERS must show that the vested benefits violate the retirement statutes, and here, they failed to do so.
This case will now proceed to a full hearing on the merits. This case is illustrative of the constant attacks on public safety pensions. We must remain diligent and aggressively defend against these types of actions or public safety pensions will suffer a significant reduction in benefits.