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6.1.C. - Page 26
<br />• Prohibition on purchases of "airtime". PEPRA also prohibits employees from purchasing
<br />nonqualified service time ("airtime"), which allows Members to boost their pensions by
<br />buying up to five years of additional service credit .41
<br />As discussed below, PEPRA may have intended to apply some of these prohibitions to both
<br />Classic and New Members. However, whether these provisions apply to Classic Members is
<br />currently before the California Supreme Court.
<br />"California Rule".
<br />A major obstacle to reducing the pension Benefits to be earned by Classic employees in the
<br />future is the so-called "California rule," an interpretation of a 1955 state Supreme Court
<br />decision48 that public employee pension Benefits, once granted, can never be modified, even for
<br />future work, without providing "comparable new advantages," and that also still leave employees
<br />with a "reasonable" pension. 49 However, in 2016, a Court of Appeal ruled that, under the
<br />Supreme Court's decision, employees only have a vested right to "a `reasonable pension' — not
<br />an immutable entitlement to the most optimal formula of calculating the pension." 50 At issue in
<br />that case was the prohibition on "spiking" discussed above at p. 11. A few months later, another
<br />Court of Appeal reached a similar conclusion in upholding a prohibition on the purchasing of
<br />"airtime" discussed above at p. 12.51 However, a third Court of Appeal recently reached a
<br />different conclusion, finding that detrimental changes to pension benefits of Classic Members
<br />would only be upheld as "reasonable" if supported by "compelling evidence that the required
<br />changes `bear a material relation to the theory ... of a pension system' and its successful
<br />operation."52 The California Supreme Court is currently considering appeals of all three Court of
<br />47 Ibid., pp. 7-8.
<br />48 Allen v. City of Long Beach, 45 Cal.2d 128 (1955), <httns:Hscocal.stanford.edu/o_)inion/allen-v-citv-lona_ -beach-
<br />26585>.
<br />49 Allen v. City of Long Beach, 45 Cal.2d 128 at 131. Beyerdorf, Brian, The Fate of Public Employee Pensions:
<br />Marin's Revision of the `California Rule', California Law Review Online, September 2017, p. 1,
<br /><www.californialawreview.ora/wm-content/unloads/2017/09/Beversdorf-02-formatted-62-72.ndf>. Walters, Dan,
<br />Jerry Brown, nearing end of terms, defies unions on pensions, San Francisco Chronicle, November 28, 2017,
<br /><httDs://www. sfchronicle. com/news/article/Jerrv-Brown-nearing-end-of-term-defie s -unions -123 89814.nhD>.
<br />so Marin Association of Public Employees v. Marin County Employees Retirement Association, 2 Cal. App. 5th 674
<br />at 680 (1st Dist. 2016), <httDs://www.lea2le.com/decision/incaco20l608l7007>.
<br />si Cal Fire Local 2881 et al., v. California Public Employees' Retirement System et al., 7 Cal. App. 5th 115 (1 st
<br />Dist. 2016),<httDs://www.eastbavtimes.com/wD-content/unloads/2017/01/123016-aDDellate-court-ruling.Ddf>.
<br />"Alameda County Deputy Sheriff's Association, et al. v. Alameda County Employees' Retirement Assn., et al., Case
<br />No. A141913, filed January 8, 2018, as modified February 5, 2018, <httDs://www.gmsr.com/w_n-
<br />content/uDloads/2018/04/scw-A141913M.ndf>. Rogers, Frances and Overby, Brett, California Court of Appeal
<br />Issues A Contrary Decision Addressing "Vested Rights " of Public Employees in the Aftermath of PEPRA: Where
<br />will the Supreme Court Land?, California Public Agency Labor & Employment Blog (Liebert Cassidy Whitmore),
<br />January 10, 2018, <httDs://www.calDublica2encvlaboremDlovmentblo2.com/Dension/califomia-court-of-anneal-
<br />issues-a-contrarv-decision-addressing-vested-rights-o f-Dublic-emDlovees-in-the-aftermath-of-DeDra-where-will-the-
<br />suDreme-court-land/>.
<br />2017-2018 San Mateo County Civil Grand Jury 12
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