Courts stand guard on pension promises

Sacramento Bee ^ | 2/7/5 | John Hill

[SmithL]

California has repeatedly given new and improved retirement benefits to public employees.

The question now has become what, if anything, it can take back.

While the state has wide latitude in scaling back pension benefits for new workers, experts say, it faces far stricter limitations when it comes to current employees.

Even some of the measures proposed by Gov. Arnold Schwarzenegger, which stop short of altering the basic pension formula in favor of steps such as encouraging workers to leave the retirement system, could trigger a legal challenge.

California case law makes it clear that any changes to the pension system that undermine its fiscal soundness amount to the state reneging on its promise to provide for public employees' retirement.

"The minute you become employed, you're making a deal with the state," said John Adkisson, a lawyer who represented the California Public Employees' Retirement System in a landmark 1997 case.

Assemblyman Keith Richman, R-Northridge, got the message when the legislative counsel told him a pension bill he had written could be challenged as unconstitutional if it applied to current workers.

Richman's bill would require state and local pensions to be based on a three-year salary average, instead of the one-year formula used by the state and many local agencies - a move that would reduce retirement benefits.

[SmithL]

Your tax dollars at work.