Retirement Board’s Crackdown on Pension ‘Spiking’ Upheld by Court of Appeals
A state appeals court has upheld a decision by the Ventura County Employees’ Retirement Association (VCERA) prohibiting leave cashouts that “straddle” calendar years — a practice that has resulted in so-called pension “spiking.” The ruling deals a major blow to Ventura County public retirees and underscores the ongoing scuffle over the Public Employees’ Pension Reform Act (PEPRA)
The initial ruling by VCERA followed the California Supreme Court’s Alameda decision upholding PEPRA in 2020. To comply with Alameda, VCERA said employees could no longer choose a 12- or 36-month period to calculate average income for retirement benefits. A group of Ventura County retirees challenged VCERA’s decision in court, but their suit was unanimously rejected this month by the Second District Court of Appeal, Division 6.
“Designating a 12- or 36-month final average compensation period that straddles multiple years to receive compensation for leave cashouts greater than the amount a member could receive in one or three calendar years, respectively, is the type of manipulation that the PEPRA exclusions sought to eradicate,” the court said.
The loss to each affected Ventura County retiree could equal hundreds of dollars a month.
“This can be the difference between whether they eat or pay a utility bill or purchase a prescription they need,” retired Ventura County Sheriff’s Department manager Tracey Pirie said.
According to CalMatters, some retirees are trying to get the pension board to apply the rule only to those who left civil service after 2020. Otherwise, the rule is retroactive to 2013.
Read more about the decision and its potential impacts here.