California rule
The California Rule is a legal doctrine requiring that government workers throughout the state of California receive the pension benefits that were in place on the day they were hired, and that those benefits cannot be reduced (though they can be increased); meaning that mandatory employee contributions cannot be increased, nor can cost-of-living allowances be decreased, not even for not-yet-earned benefits.[1][2]: 1 [3]: 1 [4]: 1 [5][6]: 1 [7] It treats government employee pensions as contracts protected by state's Constitution.[2]: 1 [4]: 1
It is followed by twelve states in total, equalling about 25% of the US population.[2]: 1 [4]: 1
References
- ^ Volokh, Eugene (February 4, 2014). "The "California rule" for public-employee pensions: is it good constitutional law?". The Volokh Conspiracy. Retrieved August 6, 2020.
This is the second of a series of posts about the "California rule" ... the short version is that in California (and some other states), the courts give constitutional protection not only to the amount of public employees' pensions that has been earned by past service, but also to employees' right to keep earning a pension based on rules that are at least as generous for as long as they stay employed.
- ^ a b c Dolan, Maura (October 20, 2016). "California promised public employees generous retirements. Will the courts give government a way out? - A case before the state Supreme Court could clear the way for reductions in public retiree benefits, which have become hugely expensive. But the outcome is "hard to predict."". Los Angeles Times. Retrieved July 30, 2020.
- ^ Dolan, Maura (March 4, 2019). "California Supreme Court curbs a pension benefit but preserves 'California Rule'". Los Angeles Times. Retrieved July 30, 2020.
- ^ a b c Volokh, Eugene (February 3, 2014). "How California courts overprotect public-employee pensions". The Volokh Conspiracy. Retrieved August 6, 2020.
- ^ Ashton, Adam (December 5, 2018). "Promised pension benefits in California can be cut, Jerry Brown's attorneys argue". The Sacramento Bee. Retrieved August 6, 2020.
That change would damage the so-called California Rule, the longstanding legal precedent that bars public agencies from cutting retirement benefits without offering workers additional compensation.
- ^ Venteicher, Wes (March 4, 2019). "California public employees' pension perks can be taken away, court rules". The Sacramento Bee. Retrieved August 6, 2020.
The case, Cal Fire Local 2881 vs. CalPERS, was seen as a test of the legal precedents known as the "California Rule" that have prevented government agencies from reducing promised pension benefits for decades.
- ^ Christopher, Ben (July 30, 2020). "Court bans "abusive" spiking, but sticks with pension protections". CalMatters.
For 65 years, the California Supreme Court has taken a rigid line on pensions for public employees: Any retirement benefits promised to a worker at the outset of a job can only be reduced if they are replaced with something of equal value. That iron-clad precedent has been dubbed "the California Rule."