On August 4, 2014, the Ventura County Superior Court ordered the County to remove an initiative from the ballot that would have phased out the County’s defined benefits pension plan and replaced it with a 401(k). A second question on the measure, if approved, would have set a cap on retirement benefits. The court invalidated the measure in its entirety.

The measure had been widely touted by those who would cut or eliminate public employees’ pensions as a model for other counties in California to replace their defined benefits pension plan with lesser retirement benefit. Nine of the County’s unions filed suit in a coalition called Citizens for Retirement Security (“CRS”), which argued that the County cannot “repeal” unilaterally its participation in the County Employees Retirement Law of 1937 (“CERL”). The choice to participate in CERL was a decision Ventura County voluntarily made. Once made, however, the County became subject to CERL’s requirements. This includes the mandate that the state legislature must determine the phase-out plan protects employees’ pension rights. Only the legislature has the power to authorize the phase-out plan.

Judge Kent Kellegrew agreed. He concluded that putting the decision to voters would amount to a waste of public tax dollars because voters are not empowered to approve a plan to withdraw from CERL. In addition, Judge Kellegrew invalidated the ballot language on a separate ground: it impermissibly contains two questions, rather than one, as required under the initiative system. Finally, he also provided the parties time to appeal prior to the election by staying his decision until August 14.

Given the ramifications of the decision, we expect the County to appeal. Because election issues are given a priority, an appellate ruling would likely issue before the final deadline for printing the November ballots later this month. We will keep you updated as the appellate process unfolds.

If you have any questions, please contact Jennifer Stoughton at jennifer@majlabor.com.