California high court hears suit on 2012 pension reform law
The California Supreme Court grappled Tuesday with whether to uphold a state law designed to help reduce a shortfall of hundreds of billions of dollars in state and local pension systems.
During a hearing, the state’s highest court did not clearly indicate which way it would rule. Only four of the court’s seven justices asked questions, and those who did speak challenged both sides in the dispute.
The court is considering a challenge by unions to a 2012 law that forbade the practice of “pension spiking” for all government employees. The practice involves inflating a future pensioner’s pay, usually at the end of their career, by cashing in years of accumulated vacation or sick pay or volunteering for extra duties.
Because pension payments are calculated based on a worker’s highest year of earnings, spiking can produce a more lucrative retirement than what the employee earned on the job. At least