Deputy Sheriffs’ Claims for Retroactive CalPERS Benefit Enhancement Barred for Failure to Exhaust Administrative Remedies

Category: Client Update
Date: Apr 18, 2017 02:58 PM

In a case handled by LCW attorneys Frances Rogers and Danny Yoo for the County of Riverside, a California Superior Court granted the County’s Motion for Summary Judgment, dismissing a lawsuit seeking retirement benefits under the California Public Employees’ Retirement System (“CalPERS”). Plaintiffs were current and retired Sheriff’s deputies who were hired by the County when their former employer, a city, dissolved its police department and began contracting with the Sheriff’s department for law enforcement services. Both the city and the County provide retirement benefits through CalPERS. 

In 2001, the County adopted a higher benefit formula of 3% at age 50 for its safety employees. This formula was more generous than the formula the city offered when the Plaintiffs worked there. Plaintiffs alleged the County had made “promises” that the 3% at 50 formula would apply to their years of service at the city. The County maintained it never made such promises and that the law would not even permit the application of the County’s retirement formula to service performed for another employer. It was undisputed that no Plaintiff had formally petitioned CalPERS, or utilized CalPERS’ administrative hearing procedures, seeking to have the County’s retirement formula apply to their years of service at the city.

The County moved for Summary Judgment, asserting multiple defenses, including that Plaintiffs failed to exhaust administrative remedies with CalPERS. In general, a party must exhaust administrative remedies, if available, before resorting to the courts. In this case, the Public Employees’ Retirement Law and the regulations of the CalPERS Board of Administration provided an avenue for members and retirees to petition CalPERS for the correction of errors or omissions in the calculation of benefits. If members or retirees are dissatisfied with CalPERS’ initial determination, they may utilize a formal appeal process. That process includes an evidentiary administrative hearing before an administrative law judge, culminating in a final administrative decision. Only after that final decision issues may an aggrieved party petition the courts. Here, the Court concluded that Plaintiffs failed to exhaust these administrative procedures with CalPERS. It therefore held their causes of actions were barred.

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