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Marsha Stillman v. Board of Retirement of the Fresno County Employees' Retirement

August 31, 2011


APPEAL from a judgment of the Superior Court of Fresno County. Donald R. Franson, Jr., Judge. (Super. Ct. No. 08CECG01019)

The opinion of the court was delivered by: Cornell, Acting P.J.



The trial court, sitting without a jury, rejected the claim of appellant Marsha Stillman for an increase in the retirement benefit paid to her by the Fresno County Employees' Retirement Association (FCERA). Judgment was entered in favor of respondent Board of Retirement (the Board), the governing body of FCERA. The issue we must resolve is whether the Board must determine the compensation upon which the retirement benefit is based from the Government Code definition of "compensation" used by FCERA or, instead, whether the Board must use the different definition of "compensation" established by the retirement plan of San Luis Obispo County. We conclude the trial court correctly determined that FCERA was required to apply the definition of "compensation" set forth at Government Code section 31640.*fn1 Accordingly, we will affirm the judgment.


Stillman was employed by Fresno County from 1969 through 1988; she accrued approximately 19 years of service credit as a member of FCERA. Stillman left her Fresno County employment and went to work for San Luis Obispo County; she accrued approximately 18 years of service credit as a member of the San Luis Obispo County Pension Trust (SLOCPT). When Stillman left her Fresno County employment, she deferred her retirement, as permitted by section 31831, because Fresno and San Luis Obispo Counties are "reciprocal" employers, a relationship we will discuss in more detail below.

Stillman retired from her San Luis Obispo County employment and concurrently filed for retirement from Fresno County, as required by section 31835.*fn2 Because reciprocal employers are each required to base an employee's retirement benefit upon the highest annual compensation earned from either employer, FCERA contacted San Luis Obispo County to ascertain Stillman's compensation. San Luis Obispo County informed FCERA that Stillman's highest average monthly salary for one year was $8,527.28. FCERA later determined, and Stillman does not dispute, that Stillman's base salary was $7,802.43 per month. In addition, however, San Luis Obispo County paid, as it did for all employees in Stillman's bargaining unit, an additional monthly amount to SLOCPT as the employee's retirement contribution. In Stillman's case, that amount was $724.85 per month. This amount is known as an employer "pickup." As a result of the San Luis Obispo County collective bargaining agreement covering Stillman, the employer pickup is designated as compensation for purposes of calculation of benefits under the retirement plan administered by SLOCPT.

FCERA notified Stillman that it deemed Stillman's compensation to exclude the employer pickup pursuant to (1) the statutory definition of "compensation"; (2) its own formal resolution addressing the issue; and, (3) the terms of a class action settlement that further defined the provisions of the Fresno County employees' retirement plan. Stillman requested a hearing before the Board.

At the hearing, Stillman contended section 31835 required FCERA to use the definition of "final compensation" employed by SLOCPT, notwithstanding FCERA's definition for retirees who did not have reciprocal benefits with San Luis Obispo County. The Board decided to employ its own definition of "final compensation," thereby excluding the employer pickup as additional compensation to which the retirement formula was to be applied. (According to the parties, the resulting difference in Stillman's monthly retirement benefit was approximately $400.)

Stillman filed the present action on March 24, 2008. The matter was tried to the trial court sitting without a jury. The trial court entered judgment for the Board and, in its accompanying written statement of decision, it determined the Board had correctly applied the relevant statutory definitions of "compensation" and "final compensation" as the basis for Stillman's retirement benefit. In addition, and as an alternative basis for the judgment, the trial court determined that Stillman's claim was barred by the waivers and releases contained in the class action settlement agreement, which had been incorporated into the final judgment in a class action.


Stillman contends the definition of "compensation" contained in the San Luis Obispo County retirement plan is the operative definition for FCERA because of section 31835. She also argues the class action settlement agreement is inapplicable to the present dispute because the settlement involved only the terms of retirement benefits arising from service with Fresno County, not to terms arising from dual service under the reciprocity statute.

We will not address the alternative basis for the judgment, namely, the waiver and release terms of the class action judgment, as we conclude the applicable definition of "compensation" is the statutory definition employed by the Board and by the trial court. We thus turn to the definitions that govern Stillman's right to retirement benefits.

FCERA was formed and operates under the provisions of the County Employees Retirement Law of 1937 (CERL), section 31450 et seq. "Under CERL an employee's pension is a combination of a retirement annuity based on the employee's accumulated contributions supplemented by a pension established with county contributions sufficient to equal a specified fraction of the employee's 'final compensation.' [Citations.] Other provisions of CERL limit the amount of employee pensions to a percentage of [citation], or not more than [citation], the employee's 'final compensation.'" (Ventura County Deputy Sheriffs' Assn. v. Board of Retirement (1997) 16 Cal.4th 483, 490 (Ventura County).) "Final compensation" is defined in detail in Ventura County and in the various sections of the Government Code discussed in that case. (See ...

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