Water Director's Raise Stays out of Pension Calculation

December 10, 2007 (PLANSPONSOR.com) - A California appellate court has upheld a ruling by a state Superior Court judge in San Diego that the California Public Employees Retirement System (CalPERS) was right in not considering a city official's special raise when determining his retirement benefit.

The 4 th  District Court of Appeal said Judge Steven R. Denton properly turned away an appeal of the CalPERS benefits determination by plaintiff Glenn E. Prentice, who was the former Director of Water Utilities for the city of Corona and later the municipality’s General Manager of the Department of Water and Power.

Denton and the appellate judges both agreed that Prentice’s case properly fell under a provision in state law and in CalPERS’ rules limiting the salary which may be considered in calculating a public employee’s retirement allowance. According to the appellate ruling, those limits included an exclusion from consideration payments which were not available to similarly situated public employees.

In Prentice’s case, the opinion said, Corona awarded the manager of its water and power department a 10.49% salary boost during the last two years of his career. Corona officials did not change their salary range for the position or make the increase available to other employees in the same work class.

Contrary to Prentice’s contention on appeal, the fact his raise was the subject of a written memorandum from the city manager to the human resources department did not satisfy the legal requirement that the raise be set forth in a written labor policy or agreement, the appellate judges asserted.

The appellate ruling is here .