California Supreme Court Caps Pensionable Vacation Cashouts at 1 Calendar Year
Updated
Updated · CalMatters · Jul 28
California Supreme Court Caps Pensionable Vacation Cashouts at 1 Calendar Year
1 articles · Updated · CalMatters · Jul 28
Summary
240 hours of cashed-out leave by retired Ventura County Counsel Leroy Smith could not all count toward his pension because his contract allowed only 200 hours in a calendar year.
The California Supreme Court said Jerry Brown’s 2013 pension law ties pensionable vacation cashouts to what a contract permits in a single calendar year, rejecting workers’ argument for any rolling 12-month period.
Justices warned that allowing employees to straddle years could effectively double pensionable cashouts for some workers who retire with two months or more of accrued leave, raising monthly benefits by hundreds of dollars.
The ruling applies to county-run pension systems, which had argued that changing the rule would force costly benefit revisions, and it reinforces a reform package enacted after pension funds were hit by the dot-com bust and Great Recession.