The Contra Costa retirement board members are being told by their lawyer that new state legislation requires them to finally end abusive and costly pension spiking practices they have allowed for years.
The new law, signed by Gov. Jerry Brown last month, prohibits counting most payments at termination for unused vacation and sick leave as income when computing pensions. It takes effect Jan. 1, so board action could spark an end-of-the-year retirement rush by older county workers who want to grab fatter pensions before the rules change.
Some labor representatives on the retirement board are balking at implementing the new law. And the Deputy Sheriffs Association has issued a veiled threat to sue on the grounds that the change would unconstitutionally violate past promises.
The state law affects 20 county-level retirement systems across the state. But Contra Costa, which has become the poster child for pension abuse, would be particularly affected because it has claimed it is not bound by appellate court rulings most others have respected.
The issue will likely come to a head on Tuesday when the retirement board is scheduled to decide whether to implement the new law. The 10 a.m. special meeting has been moved to the Crowne Plaza Hotel in Concord to accommodate an expected large crowd.
The meeting will likely feature many of the same arguments that dominated a heated debate nearly three years ago. At the time, the board's
The board responded then by only making changes to end the spiking for new employees. It did not alter practices for current workers. This time is different. The new law imposes the court rulings on current and future workers of all the county-level systems, including Contra Costa.
There's big money at stake. Retirement pay for most current workers is calculated using a formula that takes into account years of service and employees' top year of salary. By adding final payments for unused leave time, Contra Costa workers currently can significantly increase that salary number and thereby receive bigger pensions for the rest of their lives.
Under Contra Costa rules, for example, one fire chief converted a $185,000 annual salary into a starting $241,000 yearly pension; another traded a $221,000 salary for a $284,000 starting retirement. And two-thirds of the retirees from the Central Contra Costa Sanitary District boosted their retirement by 25 percent to 41 percent. The new rules would do away with much of that sort of spiking, affecting workers at all pay levels.
The changes in state law were not originally part of touted pension legislation recently rushed through the Legislature and signed by Brown. Indeed, as I pointed out in a column a day before the Aug. 31 vote, the original bill would have expanded spiking, allowing other county systems to behave as Contra Costa had.
In response to my column, the Legislature passed a companion bill clarifying its intent that all county-level systems follow the appellate court rulings. In doing so, they brought Contra Costa under the rules.
It's the implementation of that companion bill that's at issue now. The Contra Costa pension board decision on Tuesday will affect county workers as well as employees of 16 other local governments enrolled in the Contra Costa plan.
Whatever the board decides on Tuesday, litigation is almost certain. And labor leaders are likely to push the Legislature and the governor to reverse course after the Nov. 6 election -- after Brown needs to tout pension reform to help convince voters to pass his tax measure.
Meanwhile, the Jan. 1 deadline is fast approaching.
Daniel Borenstein is a staff columnist and editorial writer. Reach him at 925-943-8248 or firstname.lastname@example.org.