Judge rules Ventura County pension reform impossible without approval from state, scrapping contentious initiative

August 14, 2014

Pension policy is a major issue in California. To learn more, see "Public pensions in California."

By Josh Altic

In a court case that could set a far-reaching precedent preventing local pension reform in twenty counties containing roughly 75 percent of California residents, Ventura County Superior Court Judge Kent Kellegrew issued a decision blocking the Ventura County Sustainable Retirement System Pension Reform Initiative from the ballot. Kellegrew ruled in favor of the plaintiffs and affirmed that the county must cooperate with the state legislature to change the pension system of the county and does not itself have sufficient authority to make alterations to public pension plans. Supporters of the initiative announced on the eleventh that they decided against appealing the decision, opting instead to focus their energy on possible 2016 statewide reform.

The Citizens for Retirement Security, a group consisting largely of unions, was behind the lawsuit against the initiative, which sought to change the county's pension system from a defined benefit plan to a 401(k)-style, defined contribution plan for all new hires in an attempt to alleviate the county's $1 billion in unfunded pension liabilities.

Deborah Caplan, a lawyer representing initiative opponents, said, “The most significant defect in the initiative is that once the county has opted into the state’s county retirement program, as Ventura County has, it’s subject to continued regulation by the state. Changes require state authorization." Caplan, in this statement, refers to state legislation called the County Employees Retirement Law of 1937, which provides for one possible option for county public retirement systems and the laws that accompany it. This law was accepted by Ventura County voters in 1946.

The Committee for Pension Fairness, however, was confident in its initiative and was eager to defend it. Jonathan Wilcox, a spokesman for the committee, said, "Their legal challenge is not going to be awarded. They’ve given up trying to persuade people; now they’re going to try to persuade a judge. I think it’s pitiful.” David Grau, chairman of the Ventura County Taxpayers Association, said, "We got a legal opinion first. That was the basic question: Can the voters change the system.” Attorneys for the committee argued that because County Ordinance Number 401, which accepted the 1937 law, was approved by a vote of the people, it can be altered or repealed by a vote of the people as well. Kenneth Lounsbery and James Lough, attorneys representing the committee, wrote, “This measure amends Ventura County Ordinance Number 401 which established the pension program in 1946 by a vote of the people. The power of the people to adopt a measure carries with it the power to repeal by the same means.”

Wilcox stated that the committee was dedicated to proving the legality of its initiative in court and putting it before voters. Wilcox said, “They can throw their lawyers at us, and it’s not going to stop it. This is going to go on the ballot. And it’s going to go to the people.”

Ultimately, however, the case was decided in favor of the plaintiffs, and the measure was ordered off the ballot. Given an opportunity to appeal by Judge Kellegrew, who stayed enforcement of his ruling until August 14, 2014, initiative defendants decided against pushing the case to a higher court.

Far-reaching effects

Because each sides' arguments regarding state versus local control affect any county that has joined the state system, the outcome of this battle could affect the lives of tens of millions of Californians by preventing public pension reform at the county level. The 20 counties that accepted the 1937 Act and could therefore be affected by the ruling are listed here:

• Alameda
• Contra Costa
• Fresno
• Imperial
• Kern
• Los Angeles
• Marin
• Mendocino
• Merced
• Orange
• Sacramento
• San Bernardino
• San Diego
• San Joaquin
• San Mateo
• Santa Barbara
• Sonoma
• Stanislaus
• Tulare
• Ventura

These counties range in population from 87,000 to 10 million residents, and, together, they contain roughly 75 percent of California's population.

See also

• Ventura County Sustainable Retirement System Pension Reform Initiative (November 2014)
• Local pensions on the ballot