Labor/Employment,
Government,
Constitutional Law
Feb. 21, 2014
Can we eliminate the 'California rule' for public-employee pensions?
The goal is to treat pension benefits just like other aspects of compensation: as something earned over time and not protected from changes that operate purely prospectively.
Alexander Volokh
Associate Professor of Law
Emory University School of Law
"Sasha" Volokh blogs at the Volokh Conspiracy and has written about the "California Rule" in a White Paper called "Overprotecting Public Employee Pensions: The Contract Clause and the California Rule," published by the Federalist Society.
In 1996, Anne Arundel County, Md., modified its police service retirement plan. The main change to the plan was that the maximum cost-of-living adjustment would now be lower: While previously cost-of-living adjustments had been capped at 4 percent, they would now be capped at 2.5 percent for benefits earned after the bill's effective date.
Police officers sued the county, asserting that the change violated the U.S. Constitution's contract clause - "No State shall ... pass any ... ...For only $95 a month (the price of 2 article purchases)
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