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...