In Ventura County Employees’ Retirement Assn. v. Criminal Justice Attorneys Assn. of Ventura County, the Supreme Court today holds that dictum in its prior Alameda County Deputy Sheriff’s Assn. v. Alameda County Employees’ Retirement Assn. (2020) 9 Cal.5th 1032 pension-limiting decision (see here) correctly interpreted a provision in the Public Employees’ Pension Reform Act of 2013. The interpretation caps an amount used to determine a pension benefit for employees hired before PEPRA’s enactment, an amount that is less than was wanted by employee associations.
The court’s opinion for six justices (Chief Justice Guerrero separately concurs) by Justice Kruger construes Government Code section 31461(b)(2), which excludes from an employee’s compensation — the basis for determining their pension benefits — “[p]ayments for unused vacation [and various leave times] . . . in an amount that exceeds that which may be earned and payable in each 12-month period during the final average salary period, regardless of when reported or paid.” An employee doesn’t get to use more than one 12-month amount if the 12 months covers more than one year. “Under PEPRA,” the court says, “a public employee’s retirement benefit calculation may not include cashed out leave time in excess of the applicable annual limit set by the terms of employment, even though the employee has designated a final compensation period that straddles two or more calendar years.”
The court concludes that its holding is consistent with “at least [a] plausibl[e] read[ing]” of section 31461(b)(2), even though the employee associations’ contrary statutory construction “is linguistically possible.” But the employee-friendly interpretation “raises questions when considered in the broader context of the statute” and is contradicted by “[c]onsiderations of statutory purpose.”
Chief Justice Guerrero’s concurrence agrees with the majority’s interpretation of section 31461, but claims the court’s opinion “understates the divergence between the statutory text and th[at] interpretation,” an interpretation she says is not “apparent on the face of the statutory text.” Nonetheless, she finds “the majority is ultimately correct in its reading because the extrinsic evidence reveals a latent ambiguity” and “the purpose of avoiding pension spiking suggests” the court has reached the right result.
The court affirms a Second District, Division Six, Court of Appeal’s belatedly published opinion.
