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California Court Clarifies Fiduciary Duties in State Retirement Systems

"[T]he court of appeal concluded that the Regents had never communicated with members in a way that would reasonably create any confusion over the availability of retroactive retirement rights, and thus did not have a fiduciary duty to dispel such confusion. [The court also held] that retirement systems' fiduciary duties to their members do not mean that systems have a duty to maximize each member's benefits. That is, systems are not under any obligation to provide a member bespoke advice that will maximize their retirement allowance in light of their own particular circumstances." [Mass v. The Regents of the Univ. of Calif., No. A170424 (Calif. Ct. App. Oct. 28, 2025)]

California Court of Appeal Upholds Limits on Pensionable Pay of Former Union President

"[T]he Third District Court of Appeal unanimously upheld the CalPERS Board's exclusion of certain compensation paid to a member for serving as the president of his employee union. This case, the first to interpret Government Code Section 3558.8, held that Section 3558.8 does not require retirement systems to include all pay received while on leave for service to a labor union in retirement allowance calculations." [Serrano v. California Public Emp. Ret. Sys., No. C098392 (Cal. App. Feb. 25, 2025)]

California Court of Appeal Ends Decade-Long Dispute over Funding of County Retirement System

"[T]he Court upheld the ACERA Board's fiduciary authority and discretion to maintain its longstanding Percentage of Payroll methodology for funding the retirement system. The Court also affirmed the Board's right not to continue to study how much its participating employers might have paid to ACERA in the past, or may pay to it in the future, using a different funding methodology that the Board has not adopted." [Alameda Health System v. Alameda County Employees' Retirement Ass'n, No. A165587 (Calif. First DCA, Div. 2 Mar. 27, 2024)]

California Appellate Court Affirms Retirement Board's Limits on Inclusion of 'Straddled' Leave Cashouts in Retirement Allowance Determinations

"The Alameda decision resolved the constitutionality of one key aspect of PEPRA as it applies to members of CERL retirement systems who first were enrolled in certain California public retirement plans prior to January 1, 2013 ('legacy' or 'classic' members). The VCERA decision has now given further force, and meaning, to the Alameda decision. As anticipated, however, the scope of Alameda and its application in particular circumstances continues to be the subject of debate and litigation." [VCERA v. County of Ventura, No. B325722 [Calif. Second DCA Jan. 4, 2024)]