Two firefighters who were executive officers of their union file suit against CalPERS

Cash-outs that two retired firefighters received for accrued holiday leave credits were considered special compensation and should be included in calculating their pensions, the California Court of Appeal for the First District said in a recent case.

In the case of Hale v. California Public Employees’ Retirement System, the two petitioners were firefighters with California’s Department of Forestry and Fire Protection (Cal Fire) and were executive officers of Cal Fire Local 2881, the exclusive bargaining representative for the department’s fire control employees within the bargaining unit.

The agreements among the bargaining unit, Cal Fire, and the state of California provided the following:

• The union’s members received, instead of normal holidays, floating holidays with pay accruing on the day of the pre-existing holiday;
• Employees could “cash out” a maximum of four holidays per year if funds were available;
• For certain union officers, Cal Fire would annually buy down their leave credits to either the “normal carry-over maximum” or the amount the person had when entering office, whichever would be higher.

After the petitioners retired, the union asked the California Public Employees’ Retirement System (CalPERS) to include the amounts they received in the cash-outs when calculating their final compensation, which was part of the formula on which their pension benefits would be based....

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