Merced County employees granted more time

Judge removes deadline on retirement decision

rgiwargis@mercedsunstar.comDecember 11, 2012 

— In an effort to comply with a new state law passed in September, Merced County's retirement board advised hundreds of county employees that they must retire by Dec. 31 to keep a retirement benefit.

But a judge gave those employees more time to decide on Monday by tentatively blocking that move.

"They don't want to retire," said Barry Bennett, a Fresno attorney representing employees from two local organizations -- American Federation of State, County and Municipal Employees (AFSCME) and Merced County Sheriff's Employees Association (MCSEA).

"On the other hand, they don't want to lose the benefit they were promised when they came to work for this county," Bennett said.

The benefit provides 160 hours of "terminal vacation pay" -- a one-time payout -- when employees retire.

It stemmed from a 1997 California Supreme Court decision in Ventura County, which addressed whether terminable cash-outs could be counted toward employee pensions.

The result was Merced County's settlement in 2000, which granted the 160-hour payout.

But Assembly Bill 197, which goes into effect Jan. 1, created a challenge for board officials.

It excludes from the definition of compensation earnable "any compensation paid to enhance a member's retirement benefit ... including any payment that is made solely due to the termination of the member's employment."

Compensation earnable is pay that counts toward calculating a worker's pension, said Michael Calabrese, chief deputy county counsel representing the Merced County Employees' Retirement Association (MCERA).

"The 160-hour benefit was something that the Legislature said we must exclude," Calabrese said.

So the board wrote in an October newsletter to employees that they should retire before Dec. 31 to receive the 160-hour payout, based on the new law.

However, Bennett said the move was unconstitutional.

"If someone worked under pension, a public employer cannot take it away," said Bennett. "Unless they offer something of equal value," which Bennett said they did not.

According to court documents, about 203 employees are eligible for retirement as of Dec. 4 and would be affected.

Calabrese said they had six retirements in November, which is typical. But there were an unusually high number of retirement applications in December -- 40 total.

Bennett wants to reach employees who want to keep working before they prematurely retire because they're worried about losing their benefit.

"If you're thinking, 'I better retire' now you know you don't have to," he said. "My biggest concern was to let people know we're doing something about it."

Merced County's Retirement Board did not oppose the judge's decision on Monday.

"The board is pleased that employees will have more time to make a thoughtful, better-informed decision," Calabrese said. "We think today's action is a good step in that direction."

The next hearing will be Dec. 20. Though a final decision can take a few more weeks, the goal is to have a permanent decision on the matter, Calabrese said.

Reporter Ramona Giwargis can be reached at (209) 385-2477 or rgiwargis@mercedsunstar.com.

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