State Sen. John Moorlach, R-Costa Mesa, has been closely monitoring the arguments in CalFire Local 2881, et al. v. CalPERS before the California Supreme Court. Here is his comment on the ruling:
“Today, the Court missed a major opportunity to resolve an inferred untenable doctrine that has become one of the most pressing issues of our time – prospectively addressing massively underfunded pension obligations. For decades, California elected officials have been making promises on retirement benefits that they could not keep and the debt is catching up with them.
“Granting future benefits should not be an elevator that only goes up. While the California Supreme Court settled the case before them – ruling that what the legislature gives, it can take away as long as it is not unconstitutional – it did not give direction on how this court would deal with the California Rule as it applies to so many other cases. This half loaf result leaves elected officials to still wonder what is unconstitutional about negotiating reduced pension benefits going forward. And California State, school and municipal governments will continue to face ever-growing massive unfunded pension liabilities. This may endanger the retirement income of all current and future pensioners.
“We will have to wait to see where the court heads in the other California Rule cases before it. As time is money, it is time to stop the uncertainty and fix the California Constitution.”
Specifically, the CalFire case involves the elimination of airtime credit purchases by "classic" members of CalPERS resulting from Gov. Jerry Brown’s Public Employees' Pension Reform Act of 2013 (PEPRA). The California Supreme Court was asked to determine if airtime credits are a vested right to be protected under PEPRA. On appeal, it was declared there was no vested right to airtime since the statute creating airtime purchases did not mention this was supposed to be a vested right.
The California Rule stems from a 1955 court ruling, Allen v. City of Long Beach. It held that pension benefits in place when a public employee was hired cannot be changed without the consent of the employee’s union or for a commensurate replacement benefit (which is an untenable straightjacket).