Prentice v. Board of Administration, California Public Employees' Retirement System 
December 7, 2007, Fourth District, Div. One
Cite as 2007 SOS 7196

Court Denies Petition of Employee On Retirement Recalculation

For thirty-three years, Prentice has worked in various water and sewer agencies in Southern California. Once, he was given a 10.49 percent salary increase, which was effective during the last two years that he worked. Among the managers in his level, Prentice was the only one given the increase. However, the Public Employees Retirement System (PERS) did not include the increased salary when it calculated his retirement allowance. Prentice objected and filed a petition for writ of mandate. The trial court denied the petition for writ until it was elevated to the Appellate Court.

In deciding about the issue in Prentice v Board of Administration, California Public Employees Retirement System, the Fourth District Appellate Court, Division One ruled that the salary increase given to the manager was outside the limits of compensation. As proof, it was not reflected in the city's published salary range and was not part of the manager's regular pay rate. Therefore, it may not be used in calculating the public employee's retirement allowance. The appellate court’s ruling affirmed the earlier decision of the trial court.

According to the appellate court, they handed down their decision with great consideration of the PERS interpretation. It performed a thorough review of the Public Employees Retirement Law (PERL), PERS regulation and how retirement amounts are calculated.

In addition, the Court explained by citing to other cases and code sections, "calculation of 'compensation earnable' is not based on individual efforts." Further, the "'compensation earnable' is based on two things: employee's pay rate and special compensation measured by the amounts provided by the employer to similarly situated employees."

The Court rejected Prentice’s arguments that he “belonged to more than one group”, citing to the language in PERL. The Court also dismissed his argument that his increased salary was part of the published salary range because it was stated in the city's budget. The Court also stated that the written memorandum circulated by city personnel regarding the raise did not meet the requirements of PERS to be considered as a written, official labor policy or agreement.