SAN JOSE — Amy Morgan, spokeswoman for the California Public Employees Retirement System (CalPERS), classified recent efforts by former Monterey County peace officers to include a longevity stipend in the system’s retirement plans as “pension spiking.”

On May 24, the California Sixth District Court of Appeal ruled that the type of stipends that John DiCarlo and Richard Perez, former Monterey County peace officers, wanted to include are not reportable to CalPERS. 

Morgan told the Northern California Record that the stipend is not allowed and would improperly inflate pensions.

“[W]e are dedicated to ensuring that a member’s pension payment accurately reflects what is allowed under the law,” Morgan said. “We provide clear guidance to our contracted employers so that they understand what types of special compensation items are reportable and what is never allowed."

The case stemmed from a suit filed by DiCarlo and Perez in which they claimed Monterey County should consider an 8 percent longevity stipend to be special recompense so CalPERS would include it in its retirement packages.

The appeals court ruled against the former officers, holding that retirement law lists the types of compensations that can be included in a pension, which does not include longevity stipend.

“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 appeals court said in its decision.

“This type of pay has never been allowed to be a part of a pension payment and we will fully protect the system against types of special compensation that are prohibited under the law,” Morgan said.

Eliminating pension spiking is a priority for CalPERS, Morgan said.  

“The published opinion by the judge of this case guards CalPERS against future suits on unlawful attempts to inflate pensions with the use of special compensation,” Morgan said.

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