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California High Court Affirms Take-Away of Public Workers' Pension Benefit

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By William Vogeler, Esq. on March 06, 2019 5:57 AM

The California Supreme Court said the state did not violate constitutional rights when it repealed public workers' "air time" benefit, which allowed them to buy retirement credits for years they didn't work.

The state legislature took away the benefit in 2012, but public employees challenged the law in Cal Fire Local 2881 v. California Public Employee's Retirement System. The law did not take away credits from those who already bought them, but stopped future credit purchases.

The justices resolved that issue; however, they have agreed to review other pension disputes. The "air time" decision may clear the way.

Reducing Pensions

According to reports, legal analysts believe the decision suggests the court will rule narrowly in future pension cases. Still, the justices may have to draw a line on what governments may do to reduce pensions.

Public employees have enjoyed generous retirement plans in California, even before the state allowed them to purchase up to five years of service credit. According to critics, however, the CalPERS system cost taxpayers too much.

Daniel Borenstein, writing for the Mercury News, says the Supreme Court punted on the pension case. He said Gov. Gavin Newsom "needs to step up," and to "stop ducking the question."

"It's time for the new governor to put the public interest and fiscal preservation of the state and, especially, local government ahead of his loyalties to public employee labor unions," he says.

Fighting Cutbacks

Meanwhile, labor unions are fighting more cutbacks. They want to preserve the "California Rule," a legal doctrine that guarantees workers' pensions as they existed when they first went to work for the state.

The Supreme Court didn't resolve that issue, saying it was not necessary to its decision on "air time." But as the pension cases continue, the justices will probably have to address it next time.

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