SAN JOSE - The California Sixth District Court of Appeal recently determined that a longevity performance stipend is not a reportable retirement benefit.

Associate justices Patricia Bamattre-Manoukian, Franklin D. Elia and Nathan D. Mihara ruled on May 24 that not every stipend is considered reportable to the California Public Employees Retirement System (CalPERS) as claimed they should be by John DiCarlo, a Monterey County peace officer, and some of his peers.

The suit stemmed from a 2001 memorandum of understanding between the Monterey County and the sheriff’s department that involved an up to an 8 percent longevity performance stipend offered to any 20-year officer with either satisfactory or excellent standing. DiCarlo and fellow peace officer Richard Perez were respectively retired in 2006 and 2002, each attaining an 8 percent longevity stipend. The stipend specifically noted 20-year employees eligible to receive a 4 percent stipend for satisfactory service and an additional 4 percent for excellent performance.  

All was well until 2008 when peace officer James Bass and Michael Shapiro started to attain an 8 percent longevity performance stipend. Calling for a writ of mandamus, DiCarlo and other officers claimed that the county should consider the stipends to be special recompense that would encourage CalPERS to include them in its respective retirement packages.

According to the ruling, DiCarlo and Perez and fellow retired class members compelled “the county to retroactively and prospectively adjust their retirement contributions to include 'all compensation earned as part of their ‘Longevity/Performance Stipend,’” the court said in its decision. 

After a trial court denied DiCarlo’s request to make the stipend reportable, to which "the court granted the county’s motion for summary adjudication of issues and CalPERS’s motion for judgment on the pleadings."   

Appealing, DiCarlo claimed the trial court got it all wrong since state code contained the provision for the stipend to be considered special compensation.

“We recognize the importance of this CalPERS retirement benefit issue to the plaintiffs, but under the rules governing the interpretation of statutes and regulations the ‘longevity performance stipend does not qualify as an item of special compensation that must be reported to CalPERS and included in the calculation of plaintiffs’ retirement benefits," the court said in its ruling. "Therefore, we will affirm the judgments in favor of the County and CalPERS.’”

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