Senator Moorlach Will Monitor California Supreme Court Pension Hearing

Wednesday, December 5, 2018

State Senator John Moorlach, R-Costa Mesa, will be monitoring the California Supreme Court online tomorrow listening to the oral arguments in CalFire Local 2881, et al. v. CalPERS. He is willing to provide his impressions on the possible outcomes of cases dealing with the California Rule and how it plays into the state’s pension crisis.

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 will 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.

This case may signal where the Supreme Court is on several other so-called California Rule cases on pensions. 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).

“California state, school and municipal governments face massive unfunded pension liabilities,” warns Senator Moorlach. “If the California Supreme Court does not give governments more flexibility in negotiating labor contracts, then unaffordable pensions will send more governments into another court – federal bankruptcy court. That already has happened to the cities of San Bernardino, Stockton and Vallejo. Negotiations and mutually agreed to resolutions are preferable to a Chapter 9 filing.”