Thursday, March 22, 2018
Page 1
Court of Appeal:
Judges Elected in 2012 Subject to Reduced Benefits
By a MetNews Staff Writer
Judges who were elected in 2012 but did not take office until Jan. 7, 2013, are not entitled to the retirement benefits in existence when they were elected but, rather, to the less desirable ones put in place by legislation that went into effect Jan. 1, 2013, the First District Court of Appeal has held, affirming a trial court decision.
Six superior court judges brought a proceeding on Dec. 23, 2013, seeking declaratory relief and a writ of mandate. They contested the applicability to them, as well as other judges similarly situated, of the California Public Employees’ Pension Reform Act of 2013 (“PEPRA”), arguing that they should be able to participate in the more generous Judges’ Retirement System II (“JRS II”) benefits in effect when they were chosen to be judges in 2012.
The matter is “of considerable importance to these judges,” Justice Kathleen Banke of Div. One said in an opinion filed late Tuesday, because the new legislation “amended virtually all state employee retirement systems to begin addressing the state’s enormous unfunded pension liability and returning these systems to actuarially sound footing.”
Effects of PEPRA
Banke continued:
“Among other things, PEPRA increases employee contributions, provides for fluctuating contribution rates based on market performance and actuarial projections, and bases the amount of monthly pension payments on an employee’s final three years of compensation, rather than on only the final year.
“We conclude, as did the trial court, that the judges did not obtain a vested right in JRS II benefits as judges-elect, but rather obtained a vested right to retirement benefits only upon taking office, after PEPRA went into effect.”
Three Los Angeles Superior Court judges who gained their posts through election in 2012 and took office Jan. 7, 2013—Andrea C. Thompson, Sean Coen, and Eric Harmon—are not affected by the decision because they were, throughout 2012, deputy Los Angeles district attorneys, under a government retirement plan. Banke drew attention to a proviso in PEPRA that that it applies to a person “who becomes a member of any public retirement system for the first time on or after January 1, 2013, and who was not a member of any other public retirement system prior to that date.”
Judges Who Sued
The judges who sued, and the counties in which they sit, are Matthew McGlynn. Tehama; Gary Kreep, San Diego; Tara Flanagan, Alameda; Louie Brooks Anderholt, Imperial; Jennifer Giulian, King; and Benjamin Wirtsch, Yuba.
In the complaint, the judges asserted that “[u]pon their election to judicial office,” they became “members” of JRS II “under the terms then offered.”
Banke disagreed. She pointed out that the Public Employees’ Retirement Law provides that an “employee becomes a member” of a retirement system “upon his or her entry into employment.”
Assuming Office
The jurist wrote:
“It is only upon assuming judicial office that a judge goes on the public payroll, is authorized to perform judicial duties, commences making contributions to the JRS II retirement system, and begins to accrue ‘monetary credits’ towards a pension….
“Appellants could not, of course, be said to have entered into judicial employment as of the time they were elected. On the contrary, at least some of the appellants remained employed by their law firms to conduct an orderly disengagement from their practices and, perhaps, to ensure they received the full annual compensation they were promised. As long as they remained employed by their law firms, they could not also be employed as a judge, as judges are prohibited from engaging in such outside legal employment.”
‘Acceptance of Employment’
The judges cited the 1977 case of Miller v. State of California which says that “the right to pension benefits vests upon the acceptance of employment.” They argued that they accepted employment when they were elected.
Banke responded that neither Miller nor a case the high court handed down the following year adhering to Miller “involved an official-elect, and neither remotely suggests an individual who cannot yet legally assume the office for which they stand ready, acquires a ‘vested right’ in any public benefit attached to that office.”
She declared:
“[N]o case cited by appellants, nor any of which we are aware, suggests, let alone holds, that merely being elected to fill an office gives rise to a vested right in any of the benefits associated with that office as of the date the individual is elected. Rather, vested rights arise when an individual actually assumes office and commences his or her public employment.”
Addressing the judges’ equal protection challenge based, in part, on 2012 appointees not being subjected to the provisions of PEPRA, said the elected judges were in a unique class of persons who “had no vested right in any of the emoluments of the judicial offices they had not yet assumed.”
Payroll Deductions
Under PEPRA, payroll deductions are now fluctuating, prompting the appellants to assert that where a judge receives less in one year than the previous year, California’s constitutional ban on reducing a person’s pay while in office is offended.
“The parties have cited no California case, nor are we aware of one, that has considered whether an increased payroll deduction, resulting in a commensurate reduction in a judge’s take-home pay, violates our state’s non-diminution clause,” Banke noted.
She reviewed the United States Supreme Court’s 2001 decision in U.S. v. Hatter in which newly legislated Social Security deductions from the pay of federal justices were invalidated because the act “singled out then-sitting federal judges for unfavorable treatment” but upheld Medicare deductions because they were not discriminatory. Banke looked also at out-of-state authorities.
Application of PEPRA “year in and year out, to virtually all employees that participate in a public retirement system,” was nondiscriminatory and “cannot be said to be at odds with the purposes of our state’s non-diminution clause.”
The appealing judges also contended that PEPRA breaches the state constitutional provision that the Legislature shall “prescribe compensation for judges.” They pointed to the provision in PEPRA that a new “member” of the retirement plan must pay half the “normal cost” of pension benefits, leaving it to an actuary to figure out what the normal cost is, utilizing one of two specified methods.
This “does not mean the Legislature has unconstitutionally delegated its power to prescribe compensation,” Banke said, declaring that, to the contrary, it “has carefully ‘prescribed’ the manner in which contribution rates are to be determined.”
The case is McGlynn v. State of California, 2018 S.O.S. 1335.
Copyright 2018, Metropolitan News Company