Court fight continues over California pension changes

In an effort to solve some of the funding problems that plague California’s state-employee pension system that includes teachers, firefighters and other civil servants, the Governor scaled back some of the benefits new employees could enjoy with respect to their pensions. This new law was challenged in court, and it remains locked in the justice system.

For its part, the Governor is arguing that California should have the right to make these changes in the way benefits are applied. He even suggested that more changes, including some that might effect those already receiving pensions, are possible.

The Governor sees his changes as accounting, as opposed to an actual reduction in pension benefits. The Governor’s lawyers argue that state employees do not automatically get their pensions calculated on their ideal or preferred formula.

The trade union that is challenging the law cites the “California rule,” a legal provision that requires governments to offer some form of alternative compensation, if they wish to reduce pension benefits. The union argues that the new restrictions on employees buying “air time,” or additional years of service that they not actually perform, runs afoul of this rule.

This situation illustrates how easily employment-related disputes can arise when it comes to pension plans and other retirement plans. On the other hand, private workers in the area may also have questions and concerns about their pension or other benefits, as employers often look to scaling back retirement plans as a means of cutting costs. If an employee is facing such an issue, then they may have legal options available to them.

Source: The Sacramento Bee, “California should be able to reduce public employees’ pension benefits, Jerry Brown argues,” Adam Ashton, Nov. 22, 2017

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