Oct. 12 Board Meeting Regarding Alameda Decision
On October 12, 2020, the VCERA Board of Retirement adopted a Resolution (Redline Version and Clean version), implementing the California Supreme Court’s July 30, 2020, ruling in ALAMEDA COUNTY DEPUTY SHERIFF’S ASSN. v. ALAMEDA COUNTY EMPLOYEES’ RETIREMENT ASSN.
In Alameda, the Court addressed two types of exclusions from “compensation earnable”, the amount used to calculate legacy members’ retirement benefits.
- Payments that were excluded in the PEPRA legislation effective January 1, 2013: (a) “Pay for services outside of normal working hours”, such as standby or call-back pay, and; (b) termination pay (not an issue for VCERA).
- In-kind benefits, which would be health insurance premiums and other third-party payments not received in cash. This includes leave donations and flex credits not allowed by the employer to be received in cash.
The Resolution includes both types of exclusions. However, for the time being, the Board directed only implementation of the exclusions in the first category. The second category (dealing with flex credit) was not implemented at this time. Rather, the Board took action to seek “declaratory relief” from the courts, in coordination with various stakeholders and their counsels.
Because the Board adopted the first category of exclusions, VCERA will immediately begin excluding those pay codes from compensation earnable. Members who retire or receive benefit estimates will not see those pay types reflected in their final average compensation (FAC) calculation.
ALAMEDA EXCLUSIONS (Flex Credit)
The most impactful exclusions are the ones the Board did not yet adopt; therefore, VCERA will continue to include these items in retirement benefit calculations for new retirees until further action is taken. Benefit estimates will reflect exclusion of pay components in both categories. However, because future action may exclude flex credit, and that exclusion would be retroactive for any who retired after the date of the Alameda ruling, those retirees who retired on July 30, 2020, or after would be subject to future recalculations of benefit payments and repayment of the portion of their retirement benefits attributable to flex credit. More information will be provided as it becomes available. Visit VCERA.org for updates.