- Aug 19, 2020
- Reaction score
- Political Leaning
w/ the pandemic seems public pension portfolio management is the last thing people and elected officials are thinking about,... but as I see things its a ticking debt bomb that needs to be addressed
'Pension spiking' is not protected by California law, top court rules
For two decades, it was a treasured perk for some county employees across California: the ability to boost their pensions by cashing out unused vacation or sick leave, or working extra hours, at the end of their careers.
In some cases, workers received more in pension payments than they earned while working.
But with the state's economy struggling and a pension crisis looming, then-Gov. Jerry Brown backed a sweeping reform measure in 2013 that prohibited county workers from 'pension spiking.' Labor unions sued to overturn the new law.
On Thursday, in one of several closely watched pension cases, the California Supreme Court sided with the state, unanimously upholding a provision of the 2013 law that prohibited pension spiking by county workers.
'''Pension spiking''' not protected by California law, top court rules - Los Angeles Times
The California Rule has its origins in a case from 1955 called Allen V. City of Long Beach. The idea behind the California Rule is simple: workers enter a contract with their employer on the day they begin work and the pension benefits they are offered as part of that contract cannot be diminished, unless replaced with similar benefits. To cut or reduce pension benefits without an equivalent benefit to offset the cut would be a violation of the employment contract. California courts have continued to uphold the precedent of the California Rule in multiple cases over the past six decades.
A dozen other states that also use a contract rights approach to public pension benefits have chosen to follow the principles of the California Rule. Those states are:
What is the California Rule and why does it matter? - NPPC