On February 8, 2018, the Merced County Employees' Retirement Association (MCERA) Board of Retirement adopted Resolution 2018-1 making up to 160 hours of additional vacation payout earnings pensionable for MCERA Tiers 1, 2 and 3 members. The Board voted to adopt Resolution 2018-1 based on First District Court of Appeal’s opinion in the case of Alameda County Deputy Sheriff’s Assn. et al v. Alameda County Employees’ Retirement Assn., et al. (2018) 19 Cal.App.5th 61 (the "Alameda Decision"). Attached is a copy of the resolution.
For retiring Tier 1, 2 and 3 members, the adoption of this resolution means that up to 160 hours of additional vacation payout earnings can be included in calculating members’ final average compensation for retirement purposes. Prior to the passing of PEPRA, members were allowed to use additional vacation payout hours when terminating employment. However, PEPRA prevented the use of additional vacation payout earnings. On July 12, 2014, MCERA stopped considering vacation terminal pay for retirement purposes.
With the approval of the February 8, 2018 Resolution 2018-1, MCERA will commence using additional vacation payout earnings (up to 160 hours) for Tier 1, 2 and 3 member retirement calculations on March 22, 2018 (as directed through the Resolution). In addition, MCERA will soon begin the process of adjusting retirement benefits for eligible retirees who retired on or after July 12, 2014 to include up to additional 160 hours of vacation payout earnings. Reciprocal Tier 2 and 3 members joining MCERA on and after February 8, 2018, will not be eligible for this benefit.
Regarding the issue of including "Stand By" and "On Call" paycodes as pensionable compensation, the First District Court of Appeal remanded this issue back to the trial courts to determine the constitutionality of considering these paycodes pensionable. Because of this, the issue of the inclusion of "Stand By" and "On Call" paycodes is still being analyzed both legally and administratively, per the First District Court of Appeal’s Alameda Decision.
The MCERA website has a copy of the signed Resolution 2018-1, the Alameda Decision from the First Court of Appeal and a document of Frequently Asked Questions (FAQ’s) for your convenience.
Please feel free to contact MCERA at 209-726-2724 or email them at MCERA@co.merced.ca.us should you have any questions.
Alameda Court Decision