Chaidez v. Board of Administration of California Public Employees' Retirement System

Filed 2/3/14 CERTIFIED FOR PARTIAL PUBLICATION*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Sacramento) ----

LEONARD CHAIDEZ et al.,

Plaintiffs and Appellants, C065913

v. (Super. Ct. No. 07CS01248)

BOARD OF ADMINISTRATION OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM et al.,

Defendants and Respondents.

APPEAL from a judgment of the Superior Court of Sacramento County, Michael P. Kenny, Judge. Affirmed.

Law Offices of John Michael Jensen and John Michael Jensen for Plaintiffs and Appellants.

Peter H. Mixon and Wesley E. Kennedy for Defendants and Respondents.

* Pursuant to California Rules of Court, rule 8.1110, this opinion is certified for publication with the exception of parts II-IV.

1

Plaintiff Leonard Chaidez worked as a full-time employee for plaintiff City of Hawaiian Gardens (the City) from 1988 until 1997, ultimately earning $7,374 per month as city administrator. Chaidez became a “miscellaneous” member of the Public Employees’ Retirement System (PERS) during that employment. Later, Chaidez served as an elected member of the City Council of Hawaiian Gardens from 1999 until 2007, receiving compensation of $721.85 per month, during which time he became an “optional” member of PERS. Chaidez thought his retirement benefits would be based on his highest salary (his city administrator salary) multiplied by all his years of service, including his years on the city council. But respondent Board of Administration of PERS (the Board) determined that while Government Code sections 20037 and 200421 governed the calculation of Chaidez’s time as a City employee, his time as an elected official was instead governed by section 20039.2 Accordingly, the Board determined that the statutory scheme required PERS to calculate Chaidez’s retirement benefits on a bifurcated basis: his time as a City employee would be calculated using his highest employee salary, and his time on the city council would be calculated separately using his highest compensation as an elected official. The bifurcated calculation resulted in retirement benefits that were lower than Chaidez had expected.

1 Undesignated statutory references are to the Government Code.

2 Section 20039 provides in relevant part: “Notwithstanding any other provision of this part, ‘final compensation’ of a local member for the purpose of determining any pension or benefit resulting from state service as an elective or appointed officer on a city council or a county board of supervisors accrued while in membership pursuant to Section 20322, shall be based on the highest average annual compensation earnable by the member during the period of state service in each elective or appointed office. Where that elective or appointed service is a consideration in the computation of any pension or benefit, the member may have more than one final compensation.”