Thursday, November 15, 2018

The California (Pension) Rule

The California rule is a series of state court decisions, a key one in 1955, believed to mean the pension promised at hire becomes a “vested right,” protected by contract law, that can't be cut unless offset by a comparable new benefit, which could erase any cost saving.

Source: Google search for "California Rule."

From CALmatters:

Gov. Jerry Brown nominated long-time aide Joshua Groban to the California Supreme Court...

It’s not clear that Groban could be on the bench in time to hear oral argument in cases on the Dec. 5 calendar. On that docket is a sensitive case pushed by Brown himself that could impact the next governor’s power to change or reduce pension benefits for public employees.

Brown had requested that (Chief Justice) Cantil-Sakauye accelerate consideration of the suit brought by a firefighters’ union, challenging legislation he signed six years ago limiting pensions for employees hired after 2013.

Along with the League of California Cities, Brown contends that public agencies should be able to breach the so-called California Rule. Under that rule, officials cannot reduce pension benefits without providing other compensation to offset the losses. In practice, it has kept cities and public agencies from making even minor tweaks to increasingly expensive pension plans.

The union that represents Cal Fire firefighters, Cal Fire Local 2881, brought the lawsuit. It’s not known whether Groban worked on the case and, if he did, whether he would recuse himself from considering it.

“Any discussion of individual cases is totally premature at this point,” Brown spokesman Evan Westrup said.

Firefighters’ attorney Gary Messing said Groban will make an excellent justice, but added:

“He would have to consider whether or not his involvement in the governor’s office during the pendency of this action could create the appearance of an impropriety or a conflict. He would have to determine that.”

Brown and Gov.-elect Gavin Newsom apparently diverge on the issue. The Sacramento Bee reported that Newsom assured public employee unions in endorsement meetings earlier this year that he would honor the California Rule even if it courts overturn it...

Full story at

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