Reciprocity Issue Under California Public Entity Retirement Law

[Guest marykd]

Pursuant to California Gov’t Code § 31838.5 and a case interpreting it, Block v. OCERS, in a situation where a member retires on disability from one public system and receives one-half his or her compensation as disability retirement benefits, and also retires from and receives service retirement benefits from another reciprocal public entity for which he/she has also worked, the combination of disability and service retirement amounts cannot be greater than the amount the member would have received if all of his service had been with one entity. If it is, Section 31838.5 states: “Each entity shall calculate its respective obligations based upon the member’s service with that entity and each shall adjust its payment on a pro rata basis.”

I don’t understand how the entities are supposed to adjust their payments. As an example, the member retires on disability after 7 years with System B, at a disability retirement of $3,000 per month. Member worked for System A for 15 years and would have received an additional service retirement of $1,800, except for the cap of "all service with one entity." Due to the cap, the most John can receive is a total of $3,300.

The original calculation was $4,800 total--$3,000 from System B and $1,800 from System A. But per section 31838.5 it is now $3,300 total. How do the entities subtract the $1,500 from their respective payments—what percentage of a reduction can they each take, and what is that percentage based on?

Thanks for your help!--Mary

[PensionPro]

Per my calculations, 1,237.50 from A and 2,062.50 from B for a total of 3,300 after pro-rata adjustment.

[Guest marykd]

Thanks, PensionPro. Can you tell me what percentages you used for each entity, and were they based on percentage of total years of service or percentage of benefit that would have been paid on the the original calculations, i.e., the $4,800, or something else?--Thanks!