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Police Officer Recruits Hired Before Effective Date Of Lower Retirement Formula, But Sworn In After, Were Not Entitled To Higher Formula
On July 1, 1941, the City contracted with CalPERS to provide benefits, including retirement benefits, for its eligible employees. In an amendment effective December 19, 2009 (2009 Amendment), the City agreed to classify its police officers as local safety members. Under the 2009 Amendment, “normal retirement age” was set as 55 for local miscellaneous members and age 50 for local safety members. The retirement formula for all local safety members was 3% at age 50, regardless of their date of employment with the City or when they were sworn in.
On August 7, 2012, CalPERS and the City amended its CalPERS Contract (2012 Amendment) to divide local safety members into two groups, effective September 8, 2012. For those entering membership in the safety classification for the first time on or before September 8, “normal retirement age” was still 50. For those entering membership in the safety classification after the effective date, the normal retirement age would be 55. The retirement formulas also changed. Those entering the safety classification before September 8, would receive 3% at age 50. Those entering after the effective date would receive 3% at age 55. The 2012 Amendment followed the MOU between the City and the POA Union, which contained similar provisions.
Three employees who were non-sworn recruits before September 8, 2012, and who became sworn officers in December of 2012, brought an action before CalPERS to receive the previous 3% at 50 retirement formula, instead of at 55 under the new formula.
CalPERS found that there was no reference in the MOU to retirement benefits owed to pre-service personnel. Although the recruits were hired with the expectation they would become sworn police officers, that did not make them eligible for sworn police officer benefits at the time they were hired as unsworn recruits. Because the MOU only pertained to “current sworn police personnel”, the recruits were not entitled to sworn police benefits.