SamCERA - Ventura

 

SamCERA

Court Ordered Recalculation of Retirement Benefits (May 10th, 2004)
SamCERA has mailed a general information letter to all those members who retired prior to Jan 1st, 1999. You can read a copy of the letter by clicking HERE.

Ventura II Final Ruling (October 14th, 2003)
The California Supreme Court announced October 14th that it will not accept any appeals of the Ventura II decision. The announcement means that Judge Pollak's Superior Court ruling now has the force of law. SamCERA and the other parties to the lawsuit will be preparing a plan for the implementation of the ruling. Updates will be posted as soon as decisions are made. (See information below on The Ventura II Trial Court for background)

Ventura II Appellate Court Ruling (July 11th, 2003)
On July 11th, California's Appellate Court issued its Ventura II ruling. The Appellate Court agreed with the Trial Court's ruling on all points.

Attorneys for all of the parties will ask the California Supreme Court to review the Appellate Court's decision.

VENTURA II HEARING BEFORE APPELLATE COURT

Background: In its 1997 Ventura I decision the California Supreme Court ruled that ’37 Act County Retirement Boards had been interpreting the definition of “final average compensation” too narrowly. As a result a number of premium pay and special pay codes were added to the calculation of a member’s retirement benefit.

A number of lawsuits were subsequently filed to clarify the Supreme Court’s Ventura I decision. The Judicial Counsel consolidated the lawsuits that were not settled into the Ventura II class action lawsuit.

The Ventura II Trial Court: As previously reported, the Ventura II Trial Court issued the following rulings:

(1) The Ventura II Trial Court granted member plaintiffs’ plea that the Court mandate the retroactive application of the Ventura I decision to members who are already retired; and

(2) The Ventura II Trial Court denied member plaintiffs’ plea that the Court:

(a) include “terminal pay”, “third party payments” and “employer pickups of employee contributions” in “final average compensation” and
(b) curb the’37 Act Retirement Boards’ authority to collect unpaid contributions and interest from all “plan members” from their date of employment.

The Ventura II Trial Court’s ruling mandates that all retirees, whose benefit calculation did not include compensation they earned from pay codes that the Ventura I ruling added to “final average compensation”, would be entitled to (1) a one time lump sum payment for the increased benefits they would have been received from 1995 to the present, plus interest and (2) an increased monthly pension from now on.

The Trial Court also ruled that the ’37 Act Retirement Boards have the authority to collect unpaid contributions and interest from all “plan members” from their date of employment. “Plan members” include active members (because they did not pay contributions on these Ventura I pay codes prior to 1997) and all retirees (even those whose pensions will not increase) who received compensation related to the Ventura I pay codes. The Trial Court authorized the use of pension benefit deductions to collect the unpaid contributions from retirees.

All parties appealed the Ventura II Trial Court decision.

The State Court of Appeal: Oral arguments were presented before the State Court of Appeal on May 21, 2003. The argument lasted 90 minutes. The three judge panel asked numerous questions, almost all of which focused on the retiree retroactive benefit issue.

The Court of Appeal will issue its decision by August 21, 2003.

Once issued, the Appellate Court’s Ventura II decision will probably be appealed to the California Supreme Court.

Coordination of pending post-Ventura litigation
Currently there is a statewide coordinated litigation proceeding regarding the implementation of the California Supreme Court's Ventura decision. The coordinated proceeding seeks rulings as to whether or not the Ventura decision should be applied retroactively, whether or not certain additional cash payments should be included in the calculation of retirement benefits and how far back member contributions should be collected to pay for the member's share of the cost of the enhanced Ventura benefits.

The case brought against SamCERA and the County of San Mateo is part of the coordinated proceeding before Judge Pollak in the San Francisco Superior Court.

Rulings as of January 1st, 2003
Regarding the Ventura II lawsuit. The trial court ruled that:

  1. terminal pay was not part of Ventura I compensation and that
  2. all eligible retirees are entitled to a retroactive benefit increase and that
  3. the employer is entitled to charge all retirees for contributions on Ventura I pay codes (whether or not they are eligible for a retroactive benefit increase).

The plaintiffs appealed decisions #1 & #3 and the defendants appealed decision #2.

The Ventura II lawsuit is on appeal before the California Appellate Court. The parties have just completed the submission of their briefs. The Court has not yet scheduled oral arguments on the case. It is too early to tell whether or not the Appellate Court decision will be appealed to the State Supreme Court.

July 27th Actions regarding Retroactivity
On July 27th, Judge Pollack set the following briefing schedule:

September 15, 2000 - Petitioners submit a short statement outlining their demands regarding

  1. retroactivity and
  2. the collection of back contributions from employees and retirees.

November 22, 2000 - Liaison counsel for the respondent Retirement Boards and Counties file opening briefs.
March 2, 2001 - Petitioners file opening brief.
May 4, 2001 - Respondents file reply briefs.
June 1, 2001 - Hearing on the Retroactive application of Ventura.

June 21st Ruling
Court Excludes "Terminal Pay" from Retirement Benefit

SamCERA is not required to include "terminal pay" in the calculation of a member's retirement benefits according to Judge Stuart Pollack's June 21st ruling.

Judge Pollack's decision means your retirement benefit will not be increased by the value of the accrued hours of leave that you cash out when you retire. Examples include accrued vacation, comp time and holiday hours.

However, if you can cash out hours annually during the course of your employment, then your final average compensation must include the amount cashed out during the period used to calculate your retirement benefit. These in-service cash-outs were included in the original Supreme Court's Ventura decision.

Judge Pollack has ruled that the Supreme Court's Ventura decision does not extend to cash-outs that can not be taken prior to termination of active service. The plaintiffs may appeal Judge Pollack's decision.

Retirees must wait for the Judge's next decision to find out whether or not they will benefit from the Ventura decision. Judge Pollack is expected to schedule a hearing this Fall on whether or not the other elements of the original Ventura decision must be applied retroactively to current retirees.

June 1st Hearing
On June 1, 2000, Judge Pollak of the San Francisco Superior Court heard oral argument on several pay items from the liaison counsel of Petitioners, the Counties, and the Retirement Boards. Judge Pollak took the matter under submission and will be rendering a written opinion in the next month or so.

Judge Pollak will be deciding whether the following items must be included in the calculation of compensation earnable for the purposes of calculating members' pensions: termination pay (cash out of sick leave, holiday, vacation, comp time upon retirement), third party payments (insurance premiums), flexible benefits (cafeteria plans) and employer pick-up of employee contributions to the retirement system.

After the judge's decision is released, each of the parties will meet and confer to determine if there needs to be briefing on any other pay items.

Once a decision is made on all pay items, then a briefing schedule will be set on the issue of retroactive application of the Ventura decision.

A status hearing has been set for July 27, 2000.

Initial Rulings
Judge Pollak has made the following rulings:

Class Action: First, the Judge certified our case, and most other cases in the coordinated proceeding, as a class action. The class consists of persons

  1. who are past or present members (including retirees, deferred retirees and active employees) or future members of the SamCERA;
  2. their survivors, beneficiaries, agents and assigns; and
  3. the labor organizations recognized as the bargaining agents for the active employee members of SamCERA. A notice of the class action was sent to each of the above described persons.

Fiscal Impact: Secondly, the petitioners brought a motion to prevent the respondents (counties and retirement systems) from introducing in evidence how much it would cost to retroactively adjust all of the pensions in order to include the additions required by Ventura. The Judge denied the motion to strike. Consequently, when the Court makes its determination as to whether Ventura should be applied retroactively, it will to look at a number of items, such as, reliance on prior case law and the financial burden to the systems.