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On July 30, 2020, the California Supreme Court issued a decision (Alameda County Deputy Sheriff’s Assoc. v. Alameda County Employees' Retirement Association, aka the "Alameda Decision") affirming the legal protection of pension benefits as "vested rights" under the California Constitution. The Supreme Court rejected the legal challenges and upheld PEPRA’s changes even as applied to legacy members. "Legacy members" include general members in Plans A, B, C, D, or E or safety members in Plans A or B. The plaintiffs in the case argued that legacy members were entitled to have their pension benefit calculated according to pre-PEPRA definition of compensation earnable. Compensation earnable includes pay items that determine a member’s retirement benefit. The Court disagreed, noting that CERL is the authority of the county retirement boards. Since PEPRA amended the definition of compensation earnable, LACERA must implement the PEPRA definition of compensation earnable.

LACERA has determined that some LACERA members may be affected by the Alameda Decision. A few pay items previously considered as pensionable income must now be excluded from retirement calculations and deductions. Fortunately, the LACERA Board of Retirement has always maintained a conservative approach when determining compensation earnable and has never included termination pay, and in-kind payments in this definition. However, LACERA has identified one item, Standby Pay, that the Board included as pensionable which the Alameda Decision would now deem non-pensionable.

Standby Pay must now be excluded from retirement calculations for Legacy members. It is important to note, under certain circumstances, some Legacy members may have an account that reflects two plans that include a PEPRA plan such as Plan G for general members or Plan C for safety members. However, this decision only applies to the Legacy plan portion of these accounts, Standby Pay was never pensionable under PEPRA plans G General and C Safety.

LACERA will soon begin the process of adjusting accounts for Legacy members who were paid Standby Pay on or after January 1, 2013, including accounts for members who have since retired. We understand that many members may have questions or concerns about these adjustments to their account and benefits. If you are affected, LACERA will notify you once the calculation is complete. Please understand, that LACERA and other retirement associations have no authority or discretion to calculate pensionable pay or benefit calculations in a manner inconsistent with CERL or PEPRA.

If you have any questions about the Alameda Decision, please contact us by calling 800-786-6464 between 7:00 a.m. and 5:30 p.m. Monday-Friday or emailing us at welcome@lacera.com.