IN THE SUPREME COURT OF
CALIFORNIA
LOS ANGELES COUNTY EMPLOYEES RETIREMENT
ASSOCIATION,
Plaintiff and Appellant,
v.
COUNTY OF LOS ANGELES et al.,
Defendants and Respondents.
S286264
Second Appellate District, Division Seven
B326977
Los Angeles County Superior Court
21STCP03475
August 3, 2026
Justice Corrigan authored the opinion of the Court, in which
Chief Justice Guerrero and Justices Kruger and Simons*
concurred.
Justice Groban filed a dissenting opinion, in which Justices Liu
and Evans concurred.
__________________________
* Associate Justice of the Court of Appeal, First Appellate
District, Division Five, assigned by the Chief Justice pursuant
to article VI, section 6 of the California Constitution.
LOS ANGELES COUNTY EMPLOYEES RETIREMENT
ASSOCIATION v. COUNTY OF LOS ANGELES
S286264
Opinion of the Court by Corrigan, J.
This case presents two related issues about the job
classification and salary-setting authority granted to public
pension boards and county boards of supervisors.
The first issue concerns power granted by the California
Constitution giving public pension retirement boards “plenary
authority and fiduciary responsibility for investment of moneys
and administration of the system.” (Cal. Const., art. XVI, § 17
(section 17).) The question involves the scope of authority
granted. Specifically, does that constitutional authority over
the management of fund assets and delivery of benefits extend
more broadly to empower a retirement board to unilaterally set
civil service classification and salary levels for system
employees?
The second issue concerns the statutory authority of
county governments and retirement boards operating under the
1937 County Employees Retirement Law. (CERL; Gov. Code,
§ 31450 et seq.)1 That inquiry addresses whether, apart from
the Constitution, the CERL statutes separately grant county
retirement boards the power to set classification and salary
levels and compel county boards of supervisors to implement
1
All undesignated statutory references are to the
Government Code.
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LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
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Opinion of the Court by Corrigan, J.
these retirement board decisions in the county’s salary
ordinance.
The Los Angeles County Employees Retirement
Association (LACERA) is a retirement system operating under
the CERL statutory scheme. It petitioned for a writ of mandate
compelling the County of Los Angeles (County) to implement its
classification and salary decisions for certain staff positions.
The trial court denied the writ but the Court of Appeal reversed,
concluding retirement boards have the final authority to decide
classification and salary setting. In so holding, the court
disagreed with Westly v. Board of Administration (2003) 105
Cal.App.4th 1095, 1110 (Westly), which had construed the
constitutional authority of retirement boards more narrowly.
We conclude Westly’s narrower construction was correct.
Considered as a whole, the relevant constitutional and statutory
provisions create a system of cooperative responsibility between
retirement boards and governing bodies on issues related to
employee classification and compensation. There is no
indication that either the Legislature or the voters intended to
upset that balance by leaving these decisions to retirement
boards alone. We also reject the related argument that CERL
imposes a mandatory duty on counties to automatically
implement retirement board decisions on classification and
salary setting. Instead, we hold that, while CERL grants
retirement boards the power to “appoint,” or hire, necessary
personnel (§ 31522.1), county governments retain final
authority over their civil service classification and salaries.
Such decisions are subject to judicial review for abuse of
discretion, however, and a writ of mandate may issue if the
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OF LOS ANGELES
Opinion of the Court by Corrigan, J.
county unreasonably delays or withholds its approval of the
retirement board’s recommendations.
I. BACKGROUND
Resolving the questions on appeal brings into play the
intricate legal framework governing county employment and the
powers conferred upon retirement boards.
A. Legal Framework
1. County Employment and Civil Service
The general rule is that governing bodies of California
counties have the constitutional and statutory power to “provide
for the number, compensation, tenure, and appointment of”
their employees. (Cal. Const., art. XI, § 1, subd. (b); see Gov.
Code, § 25300; see also County of Riverside v. Superior Court
(2003) 30 Cal.4th 278, 285 (County of Riverside).) In counties
that have adopted a charter for their governance, the details of
county employment are set by ordinance enacted by the county’s
governing body. (Cal. Const., art. XI, § 4, subd. (f).)
Los Angeles is a charter county governed by a Board of
Supervisors. (L.A. County Charter, § 2.) The County’s charter
establishes a civil service system and designates all employment
positions as “unclassified” or “classified.” (Id., §§ 30, 33.)
Elected officials, heads of County agencies, and other identified
executive positions are “unclassified,” with all remaining
positions being “classified.” (Id., § 33.) By charter, the County
“has a formal civil service system . . . for filling classified
positions and fixing the salary and benefits of classified
employees.” (Holmgren v. County of Los Angeles (2008) 159
Cal.App.4th 593, 602 (Holmgren).) Civil service rules exist to
ensure fairness in the government workplace. They do so by
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Opinion of the Court by Corrigan, J.
making access to government employment broadly and fairly
available under clear criteria for employment and advancement.
They are also designed to prevent favoritism or corruption by
requiring that all employees are uniformly paid based on their
qualifications, job duties, and performance. (See Almassy v. Los
Angeles County Civil Service Com. (1949) 34 Cal.2d 387, 404
(Almassy); Los Angeles County Employees Assn. v. Superior
Court (2000) 81 Cal.App.4th 164, 169–170.)
The County’s civil service rules establish job
classifications, hiring qualifications, criteria for recruiting and
ranking candidates, and policies and systems for evaluating
employees. (L.A. County Charter, § 35.) Here, as the Court of
Appeal noted, the term “ ‘classification’ ” means “ ‘ “a set of
individual positions, suitable for similar treatment with respect
to pay, examination procedures, and work assignments that are
clustered or grouped by virtue of the similarity of the nature of
work performed, the level of job complexity and responsibility
required, the knowledge, skill and ability requirements, and the
working conditions.” ’ ” (Los Angeles County Employees
Retirement Assn. v. County of Los Angeles (2024) 102
Cal.App.5th 1167, 1186 (Los Angeles County Retirement).) The
County’s Chief Executive Officer is responsible for classifying all
employment positions and recommending salary ranges to the
Board of Supervisors consistent with the policy of “ ‘equal pay
for equal work.’ ” (Ibid.; see California Attorneys, etc. v.
Schwarzenegger (2009) 174 Cal.App.4th 424, 436 (California
Attorneys).) Once approved, these decisions are included in the
County’s annual salary ordinance.
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Opinion of the Court by Corrigan, J.
2. Laws Regulating County Retirement Systems
a. CERL
In 1937, the Legislature enacted CERL, which established
a comprehensive set of rules that counties may adopt to govern
their public employee pension systems. “Each county system is
administered by its own retirement board, which is tasked with
implementing CERL’s provisions.” (Alameda County Deputy
Sheriff’s Assn. v. Alameda County Employees’ Retirement Assn.
(2020) 9 Cal.5th 1032, 1052 (Alameda County).) Generally, the
goal of a public pension plan “is to ensure payment of all vested,
promised benefits to members, both those currently retired and
those who will retire in the future.” (Imperial County Sheriff’s
Assn. v. County of Imperial (2023) 87 Cal.App.5th 898, 903.)
These benefits are funded “from three sources: employer
contributions, employee contributions, and investment earnings
and appreciation on the system’s trust fund.” (Ibid.) In a CERL
system, the employer is typically the county itself, or a political
subdivision or district within the county. (Traub v. Board of
Retirement (1983) 34 Cal.3d 793, 798 (Traub).) Twenty counties
have CERL pension plans. (Alameda County, at p. 1055.) The
other 38 counties operate independent plans or contract with the
state’s Public Employee Retirement System (CalPERS; § 20000
et seq.). (Alameda County, at p. 1055.)
Shortly after CERL was enacted, the Los Angeles County
Board of Supervisors passed an ordinance opting into the CERL
system and adopting “all and every one of” its provisions. (L.A.
County Code, § 5.20.010; see Los Angeles County Retirement,
supra, 102 Cal.App.5th at p. 1186; Holmgren, supra, 159
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LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
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Opinion of the Court by Corrigan, J.
Cal.App.4th at p. 603.)2 Ten years after opting into CERL, the
County established LACERA as a CERL system. (Los Angeles
County Retirement, at pp. 1186–1187; Howard Jarvis
Taxpayers’ Assn. v. Board of Supervisors (1996) 41 Cal.App.4th
1363, 1373.) LACERA holds, invests, and administers the
pensions and benefits of member employees. (Weber v. Board of
Retirement (1998) 62 Cal.App.4th 1440, 1442 (Weber).) “Subject
to a few exceptions for seasonal and part-time employees, all
classified [C]ounty employees are automatically enrolled in”
LACERA by operation of law. (Holmgren, at p. 603; see
§§ 31550–31552.)
2
That ordinance makes all of CERL’s provisions binding
upon the parties here. It states: “The board of supervisors of
the county of Los Angeles, state of California, accepts the
provisions of an Act of the Legislature of the state of California,
entitled ‘An act to provide for the creation, establishment, and
adjustment with other systems, of a retirement system for
employees of the several counties and districts as defined
herein, and attaches of municipal courts, consisting of
retirement compensation and death benefits,’ approved June 30,
1937, being Chapter 677 of the Statutes of 1937 [CERL], and
said board of supervisors does hereby, by reference adopt and
incorporate all and every one of the provisions of said Act of the
Legislature as a part of and applicable to, and make all and
every one of said provisions a part of and applicable to, the
system and schedules of compensation of all officers and other
persons employed by the county whose compensation is fixed by
the board of supervisors of the county and whose compensation
is paid by the county, and all employees and officers of the
county of Los Angeles now or hereafter established by ordinance
of the board of supervisors, who are or may hereafter be eligible
to the benefits of any retirement system under the provisions of
said Act.” (L.A. County Code, § 5.20.010.)
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Opinion of the Court by Corrigan, J.
LACERA has both a “board of retirement” (§ 31520) and a
“board of investments” (§ 31520.2). The Board of Retirement
administers the system, while the Board of Investments
manages LACERA’s investment and actuarial policies. (Los
Angeles County Retirement, supra, 102 Cal.App.5th at p. 1187;
see Weber, supra, 62 Cal.App.4th at p. 1442.) In a CERL system,
county retirement boards do not design individualized pension
plans but instead implement the design enacted by the
Legislature. (Alameda County, supra, 9 Cal.5th at pp. 1066–
1067.) A retirement board’s primary duties are to protect the
system’s assets through investment decisions and actuarial
adjustments, to calculate and deliver benefits and services to
system members, and to decide members’ claims. (89
Ops.Cal.Atty.Gen. 152, 158 (2006).)
The complex interrelationship between a CERL
retirement system and county government is regulated by the
Government Code. CERL requires that the county treasurer sit
on the retirement board (§§ 31520, 31520.1) and investment
board (§ 31520.2). In addition to the county treasurer, half of
the remaining members of a CERL retirement board or
investment board are appointed by the county’s board of
supervisors.3 Accordingly, the managerial as well as “the
financial relationship between the county and the retirement
system is a close one.” (Corcoran v. Contra Costa County
Employees Retirement Bd. (1997) 60 Cal.App.4th 89, 94
3
In counties with five-member retirement boards, two
members are appointed by the county. (§ 31520.) In counties
with nine-member retirement boards, or with investment
boards, four members are appointed by the county. (§§ 31520.1,
31520.2.)
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Opinion of the Court by Corrigan, J.
(Corcoran); see, e.g., §§ 31590, 31595.1.) Also, as relevant here,
a retirement system’s staffing decisions are guided by county
requirements. CERL authorizes retirement boards to “appoint
such administrative, technical, and clerical staff personnel as
are required to accomplish the necessary work of the boards,”
but these appointments must “be made from eligible lists
created” under the county’s civil service rules. (§ 31522.1.)
Under CERL, these staff members “shall be county employees
. . . subject to the county civil service or merit system rules” and
must be included in the county’s salary ordinance. (§ 31522.1.;
see Corcoran, at p. 94.) Retirement boards may also appoint
executive personnel, including senior administrators, chief
investment and legal officers, and their deputies. These
executive personnel are also considered county employees, but
they serve at the pleasure of the boards and are not subject to
county civil service or merit system rules. (§§ 31522.2–31522.4.)
Despite these ties to county government, a CERL
retirement board is not a mere agent of the county. A retirement
board is not in privity with the county for preclusion purposes
because it is “an independent entity” (Traub, supra, 34 Cal.3d
at p. 798) with a “distinctive identity, constituency and
interests” (id. at p. 799). The board has “exclusive control” over
investments of the retirement fund, which it must manage for
the sole purposes of “providing benefits to participants . . . and
their beneficiaries and defraying reasonable expenses of
administering the system.” (§ 31595.) CERL also requires that
retirement boards “annually adopt a budget covering the entire
expense of administration of the retirement system, which
expense shall be charged against the earnings of the retirement
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Opinion of the Court by Corrigan, J.
fund.” (§ 31580.2, subd. (a).)4 In other words, all costs of
administering the retirement system, including staff
compensation, are paid from the retirement fund’s investment
earnings and not directly from county funds.
b. Section 17
The Constitution addresses the powers and
responsibilities of public pension boards in section 17 of Article
XVI, which covers Public Finance. Section 17 applies not just to
county-level retirement boards, but to the retirement board of
any public pension or retirement system operating in the state.
A 1984 ballot initiative, Proposition 21, amended section 17 to
make clear that public pension fund assets are held in trust.
(See O’Neal v. Stanislaus County Employees’ Retirement Assn.
(2017) 8 Cal.App.5th 1184, 1202 (O’Neal).) Voters later
expanded retirement boards’ authority by enacting Proposition
162, the California Pension Protection Act of 1992. This
initiative conferred upon retirement boards “plenary authority
and fiduciary responsibility for investment of moneys and
administration of the system, subject to” certain provisions.
(Cal. Const., art. XVI, § 17.) Proposition 162 specified that
retirement boards have “sole and exclusive fiduciary
responsibility over” pension fund assets and must “administer
the system in a manner that will assure prompt delivery of
benefits and related services to the participants and their
beneficiaries.” (Cal. Const. art. XVI, § 17, subd. (a).) It further
4
This requirement applies to all retirement systems with
appointed staff, including those with specific legislation making
their staff employees of the retirement system itself instead of
the county. (§ 31580.2, subd. (a); see §§ 31522.1, 31522.5,
31522.7, 31522.9, 31522.10, 31522.11.)
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Opinion of the Court by Corrigan, J.
provided that a retirement board’s fiduciary duty to participants
and beneficiaries is paramount, taking precedence over any
other duty. (Id., subd. (b).) The constitutional issue involved
here concerns the scope and application of Proposition 162’s
grant of authority.
B. Historical Relationship Between the Parties
LACERA manages the retirement fund for the County, for
the Los Angeles County Superior Court, and for several outside
districts. With a portfolio valued at over $72 billion and over
185,000 members and beneficiaries, it is the largest county
retirement system in the nation. In recent years, LACERA has
received approximately $3 billion annually from employee and
employer contributions and paid approximately $4 billion in
benefits. The $1 billion shortfall is paid from investment
earnings, which make up the great majority of LACERA’s
annual income.5
To manage this system, LACERA has more than 400
employees. Their compensation is LACERA’s largest
administrative expense. In each of the three years leading up
to this lawsuit, employee salaries and benefits comprised more
than three-quarters of total administrative costs. As CERL
requires (see § 31580.2, subd. (a)), LACERA maintains its own
budget, without County oversight. All administrative costs,
including salaries, are paid from LACERA’s investment
5
For example, in the fiscal year ending June 30, 2021,
nearly 85 percent ($15.63 billion) of LACERA’s total income
came from investment earnings. The remainder consisted of
contributions from employees ($761 million) and County
employers (approximately $1.95 billion).
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Opinion of the Court by Corrigan, J.
earnings. In July 1978, relying on sections 31522.1 and 31580.2
of CERL’s statutory framework, LACERA began hiring fund
management personnel and charging the expense against its
own budget. Previously, these fund management operations
had been handled by the County’s Treasurer and Tax Collector’s
Office and paid for from the County’s general fund.
Nearly 20 years later, in 1996, LACERA obtained a formal
legal opinion regarding the extent of the County’s authority over
the appointment of LACERA staff. LACERA’s external counsel
concluded section 31522.1 gave LACERA sole authority over
hiring, subject only to judicial review. Thus, counsel opined, the
Board of Supervisors was required to honor LACERA’s
classification and compensation decisions and include those
retirement board decisions in the County’s salary ordinance. At
the time, the County did not dispute counsel’s conclusions. It
removed LACERA employees from County collective bargaining
units and placed them into separate units governed by separate
memoranda of understanding.6
6
The dissent makes much of County Counsel’s 1996 letter
acquiescing in the legal opinion offered by LACERA’s retained
counsel. (See dis. opn. of Groban, J., post, at pp. 6, 8, 20, 33.)
From this letter and documents expressly referencing it, the
dissent projects a 40-year history of “shared understanding” (id.
at p. 2) in which the County deferred entirely to LACERA,
implementing its every classification and salary decision
without question. (See id. at pp. 33–34, 44.) The record does
not support this assertion. Indeed, it includes few specifics
about the parties’ dealings on these matters before 1996, when
LACERA retained outside counsel to research whether the
Board of Supervisors had a ministerial duty to implement
LACERA’s classification and salary decisions. It is unclear why
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Opinion of the Court by Corrigan, J.
Since these changes, LACERA has operated as an entity
that is closely related to, albeit distinct from, the County.
LACERA’s operational budget is not included in the County’s
budget. LACERA employees are subject to the County’s civil
service rules, although these rules are administered by
LACERA and not the County. LACERA personnel are assigned
to civil service classifications established by the Board of
Supervisors, but their classifications and payroll titles are
unique to LACERA and separate from Countywide
classifications and titles. The County administers LACERA’s
payroll, and LACERA uses some County resources for training
staff and developing personnel policies. LACERA employees are
eligible to participate in the County’s CERL retirement plan and
are offered the same fringe benefits, such as health care,
provided to County employees. LACERA holdings fund these
benefits, including the employer contribution for retirement.
C. This Dispute
After decades of cooperation, disagreements arose. In
2016 and 2017, based on the results of two internal personnel
reviews, the LACERA boards approved several new job
classifications and salary adjustments for information
technology, management, and administrative positions. In
accordance with the parties’ custom, LACERA asked the County
to implement these personnel decisions in its salary ordinance.
The County’s Chief Executive Officer agreed to some of the
requests but refused others, concluding the positions were “not
supported,” were not aligned with County classifications, or
seeking such an opinion would have been necessary if the
parties were in agreement.
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were beyond the salary range of comparable positions in the
County or in other counties’ retirement systems. In support of
these refusals, County Counsel Mary Wickham wrote an opinion
letter disavowing the County’s previous position and asserting
that LACERA lacked constitutional or statutory authority to
usurp the County’s control over the appointment and
compensation of County employees. Wickham’s opinion relied
on the text of article XVI, section 17 as interpreted in Westly. In
June 2018, the supervisors adopted a salary ordinance
consistent with the County Counsel’s views. LACERA did not
challenge the 2018 ordinance.
The following year, a new chief executive officer joined
LACERA and reviewed the organization’s needs. In June 2021,
LACERA sought County approval for three new positions and
adjustments to the classifications and salary levels for eight
existing positions. Several of these requests were for changes
the County had already refused in 2018. The County’s response
was again largely negative. It approved only one new position
(Deputy Chief, Investment Officer) at the salary level requested.
It approved a second new position (Information Technology
Manager II) but set a lower salary “based on internal alignment
considerations with comparable County classifications and
external salary data.” A third new position (Principal Staff
Counsel) was denied. The County also rejected all but one of
LACERA’s eight requested salary adjustments. The one
adjustment it granted was at a lower salary than requested.
In October 2021, LACERA challenged these actions by
seeking declaratory relief and a writ of mandate directing the
County to implement the classification and salary adjustments
it had denied. The case turned on whether LACERA or the
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Board of Supervisors had the power to set classifications and
salaries. The trial court denied relief. It interpreted Proposition
162 narrowly, relying on the analysis in Westly, supra, 105
Cal.App.4th 1095. Applying Westly, it determined that while
Proposition 162 gave LACERA “plenary authority” over fund
management and service delivery (Cal. Const., art. XVI, § 17),
the initiative did not confer new power on retirement boards to
set job classifications or salaries. The court further concluded
LACERA’s hiring power under CERL was subordinate to the
County’s constitutional and statutory authority to establish
classifications and compensation for all County employees. It
reasoned that section 31522.1 “ ‘permits LACERA to make
recommendations to the Board of Supervisors . . . , but the Board
of Supervisors does not have a ministerial duty to rubber stamp
those requests in a salary ordinance.’ ” (Los Angeles County
Retirement, supra, 102 Cal.App.5th at p. 1197, italics added.)
The Court of Appeal reversed, declining to follow Westly.
It applied Proposition 162’s phrase “plenary authority” broadly
to conclude that the initiative gave retirement boards complete
authority over “administration” (Cal. Const., art. XVI, § 17),
including the power to establish job classifications and salary
levels for the system’s employees. (Los Angeles County
Retirement, supra, 102 Cal.App.5th at pp. 1202–1204.) The
court also disagreed with the trial court’s analysis of the
relevant CERL statutes. (Los Angeles County Retirement, at
pp. 1218–1223.)
As noted, we granted review to resolve the conflict with
Westly and to clarify the scope of retirement boards’ authority
on these issues.
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II. DISCUSSION
“ ‘A traditional mandamus is sought to enforce a
nondiscretionary duty to act on the part of a court, an
administrative agency, or officers of a corporate or
administrative agency.’ [Citation.] ‘There are two requirements
essential to issuance of a writ of mandate under Code of Civil
Procedure section 1085: (1) the respondent [here, the County]
has a clear, present, and usually ministerial duty to act; and
(2) the petitioner [LACERA] has a clear, present, and beneficial
right to performance of that duty.’ ” (Pacifica Firefighters Assn.
v. City of Pacifica (2022) 76 Cal.App.5th 758, 765.) On review
from denial of a mandate petition, we defer to the trial court’s
factual findings if they are supported by substantial evidence
but independently review its rulings on questions of law.
(Professional Engineers in California Government v. Kempton
(2007) 40 Cal.4th 1016, 1032 (Professional Engineers).) This
case involves a purely legal question of which entity has the
ultimate authority to approve the classification and salary
decisions at issue. Accordingly, our review is de novo. (Ibid.;
Kavanaugh v. West Sonoma County Union High School Dist.
(2003) 29 Cal.4th 911, 916.)
The claims here are both constitutional and statutory in
nature. In resisting LACERA’s writ petition, the County relies
in part on constitutional provisions establishing what is
colloquially known as the “ ‘ “home rule” ’ ” doctrine. (County of
Riverside, supra, 30 Cal.4th at p. 286; see Cal. Const., art. XI,
§§ 1, subd. (b), 4, subd. (f).) The County asserts that, under the
home rule provisions, it has the constitutional authority to
appoint and fix the compensation of all County employees,
including those who work for LACERA. It contends this
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Opinion of the Court by Corrigan, J.
authority, as well as the collaborative relationships set out in
CERL, were not changed by the enactment of Proposition 162.
In sum, it urges that although LACERA has the statutory power
to appoint the staff needed to run the retirement system, the
County has the final say in deciding the classification and
compensation of these County employees.
LACERA counters that its employees are County
employees only insofar as they are subject to County civil service
rules and eligible to receive certain benefits of County
employment, like participating in the retirement system.
Notwithstanding the home rule provisions, LACERA urges that
Proposition 162 changed the legal landscape when it gave
retirement boards “plenary authority” over “administration of
the [retirement] system.” (Cal. Const., art. XVI, § 17.) It argues
this plenary authority over administration includes the power
to determine classification and compensation for its personnel.
LACERA further asserts that CERL imposes a ministerial duty
on the County to accept LACERA’s classification and salary
designations and include them in the County’s salary ordinance.
(See § 31522.1.)
Resolving these conflicts requires consideration of a
number of interconnected constitutional and statutory
provisions governing the powers of county retirement boards.
We first turn to the Constitution, then consider the related
statutory questions.
A. Constitutional Authority over Retirement System
Appointments
As noted, the California Constitution grants counties
control over employee hiring. The constitutional powers of
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Opinion of the Court by Corrigan, J.
counties are grounded in Article XI, which provides for “Local
Government.” Article XI divides the state into counties and
requires that the Legislature provide for county powers,
including the formation in each county of an elected governing
body, such as a board of supervisors. (Cal. Const., art. XI, § 1.)
In general law counties, the Constitution directs that the
governing body “shall provide for the number, compensation,
tenure, and appointment of employees.” (Id., subd. (b); see
§ 25300.) This “ ‘home rule’ ” provision was “specifically
intended to deprive the Legislature of the power to set
compensation for county employees and to entrust that
authority to county governing bodies.” (County of Sonoma v.
Superior Court (2009) 173 Cal.App.4th 322, 338 (County of
Sonoma); see Retired Employees Assn. of Orange County, Inc. v.
County of Orange (2011) 52 Cal.4th 1171, 1184 (Retired
Employees).) Similar provisions apply to counties that have
adopted a charter for their governance. (Cal. Const., art. XI,
§ 4.) In charter counties, such as Los Angeles County, the
governing body has constitutional authority over “fixing and
regulating . . . , by ordinance,” the number of “persons to be
employed” as well as their “powers, duties, qualifications, and
compensation.” (Cal. Const, art. XI, § 4, subd. (f).) “Under the
‘home rule’ doctrine, county charter provisions concerning the
operation of the county, and specifically including the county’s
right to provide ‘for the number, compensation, tenure, and
appointment of employees’ (that is, a county’s core operations)”
take precedence over conflicting state laws. (Holmgren, supra,
159 Cal.App.4th at p. 601; see Cal. Const., art. XI, § 4, subd. (g).)
As germane here, the County urges that the home rule doctrine
prevents statewide legislation from usurping county
17
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Opinion of the Court by Corrigan, J.
governments’ constitutional authority to set the salaries of their
employees.
Elsewhere in the Constitution, article XVI, section 17
regulates the investment of public pension or retirement funds.
The constitutional question here is whether Proposition 162’s
amendments to section 17 shifted authority over classification
and salary setting for retirement system staff away from county
governing bodies and to retirement boards. There is no dispute
that voters have the authority to amend the Constitution in this
way. The question is whether they intended to do so. To answer
that question, we must construe article XVI, section 17, as that
provision was amended by Proposition 162.
Familiar rules guide the analysis. “We apply the same
interpretive principles to initiatives as to legislative
enactments, beginning with the text as the best guide to voter
intent and turning to extrinsic sources such as ballot materials
when necessary to resolve ambiguities.” (In re C.B. (2018) 6
Cal.5th 118, 125 (C.B.).) For a provision enacted by the
electorate, “it is the voters’ intent that controls.” (People v. Park
(2013) 56 Cal.4th 782, 796.) “Once the electorate’s intent has
been ascertained, the provisions must be construed to conform
to that intent. [Citation.] ‘[W]e may not properly interpret the
measure in a way that the electorate did not contemplate: the
voters should get what they enacted, not more and not less.’ ”
(Ibid.)
1. Background Regarding Proposition 162’s Passage
Article XVI, section 17 “reached [its] current form through
two ballot initiatives. The first, Proposition 21, [was] passed in
1984 in an apparent response to the emerging financial markets
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OF LOS ANGELES
Opinion of the Court by Corrigan, J.
of the 1980’s.” (O’Neal, supra, 8 Cal.App.5th at p. 1202.)
Motivated by concerns that market changes made retirement
benefits vulnerable to various risks, Proposition 21 amended
section 17 and “introduced the principle that ‘assets of a public
pension or retirement system are trust funds’ that ‘shall be held
for the exclusive purposes of providing benefits to participants
in the pension or retirement system and their beneficiaries and
defraying reasonable expenses of administering the system.’ ”
(O’Neal, at p. 1202.)
The second ballot initiative, Proposition 162, was passed
in 1992 in response to “actions by the Governor and Legislature
to balance the state budget by limiting or delaying the state’s
employer contributions to CalPERS.” (Westly, supra, 105
Cal.App.4th at p. 1100; see O’Neal, supra, 8 Cal.App.5th at
p. 1203.) Among these actions, 1982 legislation had barred the
state from making a portion of its employer contributions and
required instead that any deficiencies be covered by CalPERS
reserve funds. (Westly, at p. 1100; Claypool v. Wilson (1992) 4
Cal.App.4th 646, 655.) Then, in the early 1990’s, the Legislature
made several changes to delay the state’s employer contribution
payments. In 1990, it changed the payment schedule from
monthly to quarterly; the next year, it changed the schedule to
semiannually; and the year after that, it changed the schedule
to “ ‘ “semiannually, six months in arrears.” ’ ” (Westly, at
p. 1100; see Board of Administration v. Wilson (1997) 52
Cal.App.4th 1109, 1117.) In 1991, the Legislature also repealed
statutes granting cost-of-living adjustments to retirees and
passed legislation directing that these adjustment expenditures
be allocated instead to defray the state’s employer contributions.
(Claypool, at pp. 657–658.) The same 1991 law transferred
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Opinion of the Court by Corrigan, J.
many actuarial duties from the CalPERS retirement board to
the governor. (Id. at p. 658.)
It was in this environment that voters passed Proposition
162, the California Pension Protection Act of 1992, and
expanded the authority of public pension retirement boards. As
amended by Proposition 162, the opening paragraph of article
XVI, section 17 gives public pension retirement boards “plenary
authority and fiduciary responsibility for investment of moneys
and administration of the system.” (Ballot Pamp., Gen. Elec.
(Nov. 3, 1992) text of Prop. 162, § 4, p. 70, italics omitted
(hereafter Ballot Pamp.).) Voters further delineated that
responsibility in the subdivisions that follow. (Id., at pp. 70–71
[amending Cal. Const., art. XVI, § 17, subds. (a)–(h)].) Those
subdivisions provide that a retirement board has “sole and
exclusive fiduciary responsibility” over managing system assets
and assuring prompt delivery of benefits and services to
participants and their beneficiaries. (Cal. Const., art. XVI, § 17,
subd. (a).) They return “the sole and exclusive power to provide
for actuarial services” to retirement boards (id., subd. (e)) and
specify that a board’s duty to participants and their beneficiaries
takes “precedence over any other duty” (id., subd. (b)). Other
subdivisions address the selection and removal of retirement
board members (id., subd. (f)), define the term “ ‘retirement
board’ ” (id., subd. (h)), and provide that the Legislature “may
. . . continue to prohibit certain investments” when in the public
interest (id., subd. (g)). Finally, Proposition 162 left
substantively unchanged two subdivisions that require
retirement board members to act with prudence and diligence
(Cal. Const., art. XVI, § 17, subd. (c)) and to diversify
investments (id., subd. (d)). Taken together, section 17’s
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Opinion of the Court by Corrigan, J.
subdivisions shed light on the scope of the “plenary authority
and fiduciary responsibility” the voters intended to confer. (Cal.
Const., art. XVI, § 17.)7
7
The full text of article XVI, section 17, with language
added by Proposition 162 in italics, is as follows:
“Notwithstanding any other provisions of law or this
Constitution to the contrary, the retirement board of a public
pension or retirement system shall have plenary authority and
fiduciary responsibility for investment of moneys and
administration of the system, subject to all of the following:
“(a) The retirement board of a public pension or retirement
system shall have the sole and exclusive fiduciary responsibility
over the assets of the public pension or retirement system. The
retirement board shall also have sole and exclusive responsibility
to administer the system in a manner that will assure prompt
delivery of benefits and related services to the participants and
their beneficiaries. The assets of a public pension or retirement
system are trust funds and shall be held for the exclusive
purposes of providing benefits to participants in the pension or
retirement system and their beneficiaries and defraying
reasonable expenses of administering the system.
“(b) The members of the retirement board of a public
pension or retirement system shall discharge their duties with
respect to the system solely in the interest of, and for the
exclusive purposes of providing benefits to, participants and
their beneficiaries, minimizing employer contributions thereto,
and defraying reasonable expenses of administering the system.
A retirement board’s duty to its participants and their
beneficiaries shall take precedence over any other duty.
“(c) The members of the retirement board of a public
pension or retirement system shall discharge their duties with
respect to the system with the care, skill, prudence, and
diligence under the circumstances then prevailing that a
prudent person acting in a like capacity and familiar with these
matters would use in the conduct of an enterprise of a like
character and with like aims.
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Opinion of the Court by Corrigan, J.
“(d) The members of the retirement board of a public
pension or retirement system shall diversify the investments of
the system so as to minimize the risk of loss and to maximize
the rate of return, unless under the circumstances it is clearly
not prudent to do so.
“(e) The retirement board of a public pension or retirement
system, consistent with the exclusive fiduciary responsibilities
vested in it, shall have the sole and exclusive power to provide for
actuarial services in order to assure the competency of the assets
of the public pension or retirement system.
“(f) With regard to the retirement board of a public pension
or retirement system which includes in its composition elected
employee members, the number, terms, and method of selection
or removal of members of the retirement board which were
required by law or otherwise in effect on July 1, 1991, shall not
be changed, amended, or modified by the Legislature unless the
change, amendment, or modification enacted by the Legislature
is ratified by a majority vote of the electors of the jurisdiction in
which the participants of the system are or were, prior to
retirement, employed.
“(g) The Legislature may by statute continue to prohibit
certain investments by a retirement board where it is in the
public interest to do so, and provided that the prohibition
satisfies the standards of fiduciary care and loyalty required of
a retirement board pursuant to this section.
“(h) As used in this section, the term ‘retirement board’
shall mean the board of administration, board of trustees, board
of directors, or other governing body or board of a public
employees’ pension or retirement system; provided, however, that
the term ‘retirement board’ shall not be interpreted to mean or
include a governing body or board created after July 1, 1991
which does not administer pension or retirement benefits, or the
elected legislative body of a jurisdiction which employs
participants in a public employees’ pension or retirement
system.” (Ballot Pamp., supra, text of Prop. 162, § 4, pp. 70–71,
stricken text omitted.)
22
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Opinion of the Court by Corrigan, J.
2. Textual Analysis
The parties’ constitutional dispute focuses on the first
paragraph of section 17, which grants retirement boards
“plenary authority and fiduciary responsibility for investment of
moneys and administration of the system, subject to” the
subdivisions that follow. (Cal. Const., art. XVI, § 17, italics
added.) The first of these subdivisions states that a “retirement
board shall . . . have sole and exclusive responsibility to
administer the system in a manner that will assure prompt
delivery of benefits and related services to the participants and
their beneficiaries.” (Id., subd. (a), italics added.)
The Court of Appeal interpreted these provisions broadly.
It reasoned that the word “ ‘plenary’ means ‘ “[f]ull, entire,
complete, absolute, perfect, unqualified.” ’ ” (Los Angeles
County Retirement, supra, 102 Cal.App.5th at p. 1202.) From
there, it concluded Proposition 162’s grant of “plenary authority”
gave retirement boards “complete and absolute” power “subject
only to the terms of Proposition 162 and judicial review.” (Los
Angeles County Retirement, at p. 1202.) This approach failed to
consider the provision as a whole. Proposition 162 grants
retirement boards plenary authority over only the areas it
addresses. The question here is over what, exactly, that plenary
authority extends. Understood in light of its stated goals,
supplementary materials, and place in the full scheme of related
laws, the initiative’s language does not sweep as far as the Court
of Appeal concluded.
Even the most “ ‘broad and comprehensive’ language”
must be construed in context. (Castellanos v. State of California
(2024) 16 Cal.5th 588, 603.) This principle applies to
constitutional grants of “plenary authority” in the same way it
23
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Opinion of the Court by Corrigan, J.
does to all other statutory language. For example, in
Independent Energy Producers Assn. v. McPherson (2006) 38
Cal.4th 1020, 1035, the lower court had “relied upon a number
of dictionaries that define ‘plenary’ to mean ‘complete,’
‘absolute,’ or ‘unqualified’ ” to conclude that “ ‘the phrase
“plenary power” ’ ” in a constitutional provision “ ‘connotes total
power, to the exclusion of all others.’ ” We rejected this analysis,
explaining that the language had to be interpreted in light of the
provision’s purpose and objective. (Id. at pp. 1036–1038; see
also Hustedt v. Workers’ Comp. Appeals Bd. (1981) 30 Cal.3d
329, 342–345 [applying the same analysis to the grant of
“plenary power” in article XIV, section 4, for the creation of a
worker’s compensation system].)
The Court of Appeal here adopted a similarly broad
interpretation of the phrase “administration of the system.”
(Cal. Const., art. XVI, § 17.) In addition to section 17’s opening
paragraph, the phrase appears in two subdivisions that refer to
a retirement board’s duty of “defraying reasonable expenses of
administering the system.” (Id., subds. (a), (b).)8 As the Court
of Appeal noted, this phrase echoes CERL’s statutory directive
that the assets of a pension fund be held “for the exclusive
purposes of providing benefits to participants . . . and defraying
reasonable expenses of administering the system.” (§ 31595; see
Los Angeles County Retirement, supra, 102 Cal.App.5th at
p. 1203.) Another CERL provision in effect in 1992 implies that
employee compensation is an “expense of administration”
8
The language was added to the Constitution in 1984 by
Proposition 21 and thus predates Proposition 162. (See Cal.
Const., art. XVI, former § 17; see also Ballot Pamp., supra, text
of Prop. 162, § 4, p. 70.)
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Opinion of the Court by Corrigan, J.
because it requires that retirement boards charge “the entire
expense of administration” against earnings only if they have
appointed personnel. (§ 31580.2, subd. (a).) Because “[t]he
electorate is presumed to be aware of existing laws” when it
enacts an initiative (Ruelas v. County of Alameda (2024) 15
Cal.5th 968, 979 (Ruelas)), the Court of Appeal reasoned that
Proposition 162’s grant of “plenary authority” over
“administration of the system” (Cal. Const., art. XVI, § 17)
should be interpreted consistently with CERL to include
authority over all personnel matters, including compensation.
(Los Angeles County Retirement, at pp. 1202–1204.)9
A problematic aspect of this analysis was the court’s
reliance on select language in certain CERL statutes to assert
that the same meaning was intended for the constitutional text
of section 17. We have stressed that an initiative’s words “ ‘must
be construed in context, keeping in mind’ ” the purpose of the
provision and, to the extent possible, harmonizing provisions
related to the same subject. (People v. Valencia (2017) 3 Cal.5th
347, 357 (Valencia).) Although we do attempt to harmonize
constitutional provisions with existing statutes to avoid a
9
The court also relied on CERL provisions governing
personnel appointments in specific counties. (Los Angeles
County Retirement, supra, 102 Cal.App.5th at p. 1203.) In
addition to prescribing certain terms of employment, these
county-specific statutes direct that employee compensation
“shall be an expense of administration of the retirement
system.” (§ 31522.5, subd. (c); see §§ 31522.9, subd. (d),
31522.10, subd. (c), 31522.11, subd. (c).) Because these statutes
were not enacted until several years after the passage of
Proposition 162, however, they cannot shed light on the
meaning of the initiative’s language.
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Opinion of the Court by Corrigan, J.
conflict (Ruelas, supra, 15 Cal.5th at p. 979), it is the operation,
and not necessarily the wording, of the different enactments
that must be brought into harmony if possible (see State Dept.
of Public Health v. Superior Court (2015) 60 Cal.4th 940, 955–
956). Moreover, CERL does not afford an exclusive basis for
comparison because section 17 sweeps more broadly than the
county-level retirement systems CERL concerns. Section 17
describes the power of any “public pension or retirement system”
board in California, ranging from city retirement systems to the
statewide systems of CalPERS and the California State
Teachers’ Retirement System (CalSTRS). (Cal. Const., art. XVI,
§ 17.) Instead of looking to statutes that address limited aspects
of some retirement boards’ authority, the court should have first
considered the “ ‘overall . . . scheme’ ” (Professional Engineers,
supra, 40 Cal.4th at p. 1037) laid out in section 17 itself.
A more holistic reading sheds light on section 17’s
statement that retirement boards “shall have plenary authority
and fiduciary responsibility for investment of moneys and
administration of the system.” (Cal. Const., art. XVI, § 17.)
That statement explicitly provides that it is “subject to all of the
following” and sets out eight subdivisions. (Ibid.) The Court of
Appeal’s approach was influenced by its interpretation of the
phrase “ ‘subject to.’ ” (Los Angeles County Retirement, supra,
102 Cal.App.5th at p. 1204.) The court interpreted this
language to mean that section 17’s listed subdivisions
functioned only to place limits or conditions on a retirement
board’s authority, but not to define the nature of that authority
in the first place. (Los Angeles County Retirement, at p. 1204.)
As noted, the Court of Appeal here did not write on a clean
slate when construing the meaning of “plenary authority” in
26
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Opinion of the Court by Corrigan, J.
Proposition 162. The question was first considered in Westly,
supra, 105 Cal.App.4th 1095, which the Court of Appeal
declined to follow. Westly involved the legality of several actions
the CalPERS retirement board took based on its reading of
Proposition 162. (See Sen. Rules Com., 3d reading analysis of
Sen. Bill No. 269 (2003–2004 Reg. Sess.) as amended June 2,
2003, p. 3.) Among other things, the CalPERS board had voted
to exempt its portfolio managers from civil service, increase
their salaries above the range set by the Department of
Personnel (DPA), and pay them from the retirement fund
without approval from the DPA or state Controller. (Westly, at
p. 1105.) CalPERS then placed the managers on its own payroll
system. (Ibid.; see Sen. Rules Com., 3d reading analysis of Sen.
Bill No. 269, supra, at p. 3.) It went on to raise board member
compensation and increase travel and other reimbursements
beyond DPA-approved rates. (Westly, at p. 1103.) Westly held
these actions violated laws regulating state civil service and
payroll. (See id. at pp. 1099–1100, 1104.)
Westly rejected the board’s argument that its “plenary
authority” under Proposition 162 superseded laws authorizing
the DPA to set civil service classification and salary ranges for
CalPERS employees. Instead, the court concluded the
initiative’s grant of exclusive authority over “administration of
the system” (Cal. Const., art. XVI, § 17) pertained specifically to
“the management of the assets and their delivery to members
and beneficiaries of the system, not the remuneration of those
who administer it” (Westly, supra, 105 Cal.App.4th at p. 1110).
Westly also rejected the CalPERS board’s assertion that it
needed authority over classification and salary setting to satisfy
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Opinion of the Court by Corrigan, J.
its constitutional fiduciary duties. (Id. at p. 1114.)10 In
construing the relevant constitutional text, Westly observed that
section 17’s “subdivisions serve to limit and define the authority
and responsibility granted in the [section’s] initial paragraph.”
(Westly, at p. 1109, italics added.) The Court of Appeal here
rejected this construction, instead viewing the subdivisions
solely as limits on retirement boards’ otherwise unfettered
power.
We conclude, as did the Westly court, that the listed
subdivisions define as well as limit a retirement board’s plenary
authority when the provision is considered as a whole. In
statutory interpretation, “the phrase ‘subject to’ does not have a
fixed meaning, but must be interpreted in context.” (People v.
Steward (2018) 20 Cal.App.5th 407, 420; see People v. Morales
(2016) 63 Cal.4th 399, 407.) Some of section 17’s subdivisions
do place limits on retirement board authority, requiring that
they use due care, diversify the system’s investments, and place
their duty to participants above all others. (See Cal. Const.,
art. XVI, § 17, subds. (b)–(d).) But other subdivisions define the
boards’ authority itself. Subdivision (a) grants “sole and
10
Shortly after Westly was decided, an urgency measure was
enacted authorizing the CalPERS and CalSTRS boards to
establish civil service classifications and salary levels for certain
senior executives and investment managers. (Stats. 2003,
ch. 856, §§ 2–3, pp. 6263–6265.) The legislation’s purpose was
to enable these boards “to attract and retain key personnel” by
offering compensation “competitive with the compensation paid
to employees in other retirement and financial service entities,
consistent with the holding of Westly . . . , and notwithstanding
the provisions of the Government Code that provide the State
Personnel Board and the [DPA] that authority.” (Sen. Bill
No. 269 (2003–2004 Reg. Sess.) § 1, subd. (e).)
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Opinion of the Court by Corrigan, J.
exclusive responsibility to administer the system” but clarifies
that a board must exercise that responsibility “in a manner that
will assure prompt delivery of benefits and related services.”
(Id., subd. (a).) Subdivision (b) confirms the limited scope of
board members’ authority by specifying that their duty to
participants requires “minimizing employer contributions” and
“defraying reasonable expenses” of administration. (Id.,
subd. (b).) Subdivision (e) defines a board’s “sole and exclusive
power to provide for actuarial services” with no limitation at all
(id., subd. (e)), which contradicts the Court of Appeal’s assertion
that the subdivisions serve solely as limits on retirement boards’
otherwise unfettered authority. We agree with Westly that,
taken as a whole, section 17’s subdivisions properly clarify the
“plenary authority” that voters conferred over retirement
system administration. (Cal. Const., art. XVI, § 17; see Westly,
supra, 105 Cal.App.4th at p. 1109.)
Precisely how those subdivisions clarify the scope of
authority is illuminated by their elaboration of the phrase
“administration of the system.” (Cal. Const., art. XVI, § 17.)
Variations on this phrase appear in two places after section 17’s
prefatory paragraph. (See Ballot Pamp., supra, text of Prop.
162, § 4, pp. 70–71.) In the first, subdivision (a) states that a
retirement board “shall . . . have sole and exclusive
responsibility to administer the system in a manner that will
assure prompt delivery of benefits and related services to the
participants and their beneficiaries.” (Id. § 4, subd. (a), p. 70,
some italics omitted.) In the second, newly added
subdivision (h) states that a “ ‘retirement board’ ” does not
include “a governing body or board created after July 1, 1991
which does not administer pension or retirement benefits.” (Id.
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Opinion of the Court by Corrigan, J.
§ 4, subd. (h), p. 71, some italics omitted.)11 Thus, both of
Proposition 162’s references to “administration” specifically
concern the delivery of benefits.
Westly reasoned that retirement boards’ “plenary
authority” over “administration of the system” encompasses
only the management of system assets and the delivery of
benefits to members and beneficiaries. (Westly, supra, 105
Cal.App.4th at p. 1110.) It was not intended to eclipse other
well-established constitutional and statutory allocations of
authority over classification and compensation. (Ibid.) Our
review of the constitutional text points to the same conclusion.
All of the powers and responsibilities discussed in section 17
concern the supervision of a pension fund’s investments and the
proper distribution of benefits. None of the language added by
Proposition 162 concerns retirement boards’ authority over their
staff’s compensation or classification. (See Westly, at p. 1110.)
Nor does other language in section 17 address this subject or say
anything about the interaction of its provisions with civil service
laws or the Constitution’s home rule provisions. The Court of
Appeal’s contrary analysis here went astray by focusing heavily
on the phrase “plenary authority” without considering the
surrounding context and the purposes for which this language
was included. Considered as a whole, section 17’s text grants
retirement boards exclusive authority over the management of
system assets and the delivery of benefits and services, but it
does not confer new authority over the classification or
compensation of their personnel or otherwise upset settled
interpretations of civil service or home rule jurisprudence.
11
The application of this subdivision is not at issue here.
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Opinion of the Court by Corrigan, J.
This interpretation is consistent with other Court of
Appeal decisions that have rejected overly expansive
interpretations of Proposition 162 asserted by retirement
boards. Singh v. Board of Retirement (1996) 41 Cal.App.4th
1180 involved an employee’s petition for a writ of mandate
against a county retirement system that had denied him
disability retirement benefits. The retirement board opposed
the petition, arguing its plenary power to determine benefits
could not be disturbed, even by the courts. (Id. at p. 1184.) The
Singh court disagreed. It concluded Proposition 162 did not
impliedly repeal the writ of mandate statute at issue (Code Civ.
Proc., § 1094.5), and voters did not intend to insulate retirement
board decisions from judicial review. (Singh, at pp. 1190–1192.)
In a similar case the following year, a county retirement board
argued its plenary authority under section 17 protected it from
grand jury investigation. (Board of Retirement v. Santa
Barbara County Grand Jury (1997) 58 Cal.App.4th 1185.)
Again, the court disagreed, explaining that “Proposition 162 did
not insulate pension boards from judicial oversight.” (Id. at
p. 1193.)
Finally, in City of San Diego v. San Diego City Employees’
Retirement System (2010) 186 Cal.App.4th 69 (City of San
Diego), a city retirement board asserted that its plenary
authority to administer system assets gave it the ability to
impose charges on the city for underfunded benefits. Relying on
Westly, the court explained that retirement boards’ authority is
delineated in section 17 and does “not extend to matters within
the purview of other branches of government” or “areas not
expressly dedicated to the board.” (City of San Diego, at p. 79.)
The court concluded the city had exclusive jurisdiction over the
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legislative act of granting retirement benefits. As a result, it
was not within the board’s power to expand benefits beyond
those the city had provided. (Id. at p. 80.) Despite broad
language added to section 17 by Proposition 162, the retirement
board’s power over benefits was limited to administering the
benefits that had been set by the city. (City of San Diego, at p.
80.) Similarly, here, it is well settled that “the setting of
[government] employee compensation is a legislative act that is
part of the governing body’s budgetary process.” (County of
Sonoma, supra, 173 Cal.App.4th at p. 347; see Bagley v. City of
Manhattan Beach (1976) 18 Cal.3d 22, 25 (Bagley); Collins v.
City & County of San Francisco (1952) 112 Cal.App.2d 719, 730.)
Proposition 162 did not purport to expand retirement boards’
authority to embrace the classification and compensation
decisions that are within the purview of local governing bodies,
nor can we agree with the Court of Appeal that it did so sub
silentio.
The conflict between the Court of Appeal and other
decisions construing Proposition 162 reveals that reasonable
minds may draw different conclusions from the constitutional
language. As a result of this textual ambiguity, we also consider
extrinsic evidence of voter intent. (See Valencia, supra, 3
Cal.5th at p. 357.) “Specifically, we examine the materials that
were before the voters.” (Id. at p. 364.)12
12
In addition to these materials, LACERA has asked that
we take judicial notice of: a 2002 opinion letter setting forth the
Contra Costa County Counsel’s interpretation of Proposition
162’s scope; an analysis of the initiative prepared by the
California Senate Office of Research; and three newspaper
articles expressing views on the initiative. We deny the request
32
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3. Ballot Materials
a. Findings and Declarations
The electorate’s intent comes into even sharper focus when
considered in light of the ballot materials. As noted, voters
enacted Proposition 162 in response to a series of legislative acts
that would have invaded CalPERS’s retirement fund holdings
and used them to defray the state’s employer contributions or
otherwise balance the state budget. (See ante, at pp. 18–19; see
also Westly, supra, 105 Cal.App.4th at p. 1100.) Ballot materials
demonstrate that the initiative was primarily designed to
prevent retirement fund assets being appropriated and used for
such a purpose. The proposed law’s Findings and Declarations
asserted that politicians had undermined citizens’ retirement
security “by repeatedly raiding their pension funds.” (Ballot
Pamp., supra, text of Prop. 162, § 2, subd. (c), p. 70.) In order to
protect pension funds and the retired employees who depend on
in its entirety because the materials are irrelevant. The opinion
of a single county counsel 10 years after Proposition 162’s
enactment sheds no light on the voters’ intent in passing the
initiative. (See People v. Castro (1985) 38 Cal.3d 301, 311.) The
Senate Office of Research analysis is also irrelevant because,
even if it reflected the understanding of the Legislature as a
whole, the Legislature did not draft Proposition 162, and
LACERA has not shown that the analysis was distributed to
voters. (See Castro, at pp. 311–312.) The first news article,
published 10 months after the 1992 election, does not illuminate
voter intent at the time of passage. (See id. at p. 311; Farmers
Ins. Exchange v. Superior Court (2006) 137 Cal.App.4th 842,
857–858.) And, although the remaining news articles were
published before the election, “there is no evidence that the
electorate as a whole, or indeed any significant part of it, was
aware of” them, or the views they expressed. (Valencia, supra,
3 Cal.5th at p. 364, fn. 5.)
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Opinion of the Court by Corrigan, J.
their solvency, the initiative declared that “politicians must be
prevented from meddling in or looting pension funds” (id. § 2,
subd. (d), p. 70) and “retirement board trustees must be free
from political meddling and intimidation” (id. § 2, subd. (f),
p. 70).
The Purpose and Intent section of the initiative listed
similar concerns. It stated that the voters intended Proposition
162 to: “protect pension funds”; give voters control over the
composition of retirement boards; prevent future tax increases
that could be required if politicians were allowed to divert
pension funds to other uses; ensure that fund assets are used
exclusively to provide benefits; ensure that actuarial
determinations are made exclusively by retirement boards; and
affirm that a retirement board’s duty to participants and
beneficiaries takes precedence over all other duties. (Ballot
Pamp., supra, text of Prop. 162, § 3, p. 70.) Of particular
interest here, this section also declared voters’ intent “[t]o give
the sole and exclusive power over the management and
investment of public pension funds to the retirement boards
elected or appointed for that purpose, to strictly limit the
Legislature’s power over such funds, and to prohibit the
Governor or any executive or legislative body of any political
subdivision of this state from tampering with public pension
funds.” (Id. § 3, subd. (e), p. 70, italics added.)
Consistent with its broad interpretation of the initiative’s
text, the Court of Appeal read parts of this statement to infer a
voter intent to shift classification and salary-setting authority.
The court reasoned that such control was necessary to protect
retirement systems from “ ‘meddling’ ” by county boards of
supervisors. (Los Angeles County Retirement, supra, 102
34
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OF LOS ANGELES
Opinion of the Court by Corrigan, J.
Cal.App.5th at p. 1208.) This inferential reading reaches too
broadly and is not supported by the language in question. As
Westly observed, the initiative’s declarations of purpose
consistently indicate voters’ desire “to protect pension funds by
giving pension boards the authority to administer the funds
without interference.” (Westly, supra, 105 Cal.App.4th at
p. 1110.) To this end, voters expressed an intent to give
retirement boards “sole and exclusive power over the
management and investment of public pension funds.” (Ballot
Pamp., supra, text of Prop. 162, § 3, subd. (e), p. 70, italics
added.) A natural reading of the term “funds” here means the
assets of a retirement system, which the system invests and uses
to pay benefits to retired employees and their beneficiaries.13
The initiative consistently referred to risks posed by
legislative and gubernatorial “raiding” (Ballot Pamp., supra,
text of Prop. 162, § 2, subd. (c), p. 70), “looting” (id. § 2, subd. (d),
p. 70), “plunder[ing]” (id. § 2 subd. (h), p. 70), or “tampering
with public pension funds” (id. § 3, subd. (e), p. 70), all acts that
would redirect those assets away from their intended purpose to
ensure financial security for retirees and their beneficiaries. It
also identified a need to protect retirement board trustees “from
13
Although it might be possible to understand “funds” in
some contexts as embracing something more than the invested
money held in trust, that reading does not make sense given the
syntax of section 3, subdivision (e), which refers to the
“investment of public pension funds.” (Ballot Pamp., supra, text
of Prop. 162, § 3, subd. (e), p. 70, italics added.) Moreover, a
narrower reading comports more closely with other
declarations, which express concern over the “looting [of]
pension funds” (id., § 2, subd. (d)) and a desire “to safeguard the
competency of public pension funds” (id., § 3, subd. (f)).
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OF LOS ANGELES
Opinion of the Court by Corrigan, J.
political meddling and intimidation” (id., § 2, subd. (f), p. 70),
from “political ‘packing’ ” through the appointment process, and
from political “encroachment” upon the boards’ actuarial duties
(id. § 2, subd. (g), p. 70). Yet none of these concerns reflects an
intent to modify the long-established authority granted to
county governments by constitutional home rule provisions and
county charters to manage the county workforce as a consistent
whole. Taken either individually or together, nothing in
Proposition 162’s findings or declarations suggests that voters
intended to change the existing scheme of governmental
oversight regarding the classification and compensation of
retirement system staff who are identified as county employees.
b. Legislative Analyst’s Summary
The Legislative Analyst’s summary also gave no
indication that the initiative would shift control over salary
setting to retirement boards. As required by the Elections Code,
the Legislative Analyst provides an impartial analysis of ballot
initiatives to give “information the average voter needs to
adequately understand the measure,” including “the effect of the
measure on existing law.” (Elec. Code, § 9087, subd. (b); see
Valencia, supra, 3 Cal.5th at pp. 365–366.) Here, after briefly
describing how public retirement systems work and the recent
legislation that prompted Proposition 162, the Legislative
Analyst described three changes the initiative would make to
these retirement systems. First, Proposition 162 would require
that retirement boards have as their highest priority the
provision of benefits. (Ballot Pamp., supra, analysis of Prop. 162
by Legis. Analyst, p. 37.) Second, it would prohibit the
Legislature from changing the terms and conditions for
retirement board membership without voter approval. (Ibid.)
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OF LOS ANGELES
Opinion of the Court by Corrigan, J.
Third, Proposition 162 would “give[] the board of each public
pension system complete authority for administration of the
system’s assets and for the actuarial function.” (Ballot Pamp., at
p. 37, italics added.)
Notably, the Analyst’s description of retirement boards’
authority over administration is narrower than the far-ranging
authority over all administrative matters asserted by LACERA
and the Court of Appeal. Instead, consistent with Westly’s
interpretation, the Analyst described Proposition 162’s grant of
authority as specifically encompassing “administration of the
system’s assets.” (Ballot Pamp., supra, analysis of Prop. 162 by
Legis. Analyst, p. 37, italics added.) A reasonable voter would
understand this phrase to mean that the proposition would give
retirement boards full authority over all aspects of managing
the holdings of the pension fund itself, that is, collecting and
investing contributions and paying benefits to retirees and their
beneficiaries. But the phrase does not logically encompass a
newly conferred authority to make decisions about the
classification and compensation of civil servants who work for
the retirement system.
The Legislative Analyst’s summary repeated this
narrower description of administrative authority in its
discussion of Proposition 162’s fiscal effect. The Elections Code
requires that the Analyst’s summary “includ[e] a fiscal analysis
of the measure showing the amount of any increase or decrease
in revenue or cost to state or local government.” (Elec. Code,
§ 9087, subd. (a).) In this section, under the subheading
Administration of Assets, the analysis of Proposition 162 stated:
“Giving complete authority for administration of public
retirement system assets to the governing boards could reduce
37
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Opinion of the Court by Corrigan, J.
oversight of these activities by state or local government. This
would have an unknown effect on the costs of the systems.”
(Ballot Pamp., supra, analysis of Prop. 162 by Legis. Analyst,
p. 37, italics added & boldface omitted.) This consistent and
repeated description conveyed that Proposition 162 gave
retirement boards authority over the administration of “assets,”
specifically, including their collection, investment, actuarial
supervision, and distribution. But it did not convey authority
over every arguably administrative matter. Like Proposition
162’s findings and declarations, the impartial analysis
mentioned no change in which governmental entity ultimately
determines the classification and compensation of retirement
system employees.
c. Arguments in Support and Opposition
The ballot arguments presented for and against the
measure are also informative. The argument in favor of
Proposition 162 said nothing about giving retirement boards
exclusive authority over salaries or classification. Echoing the
uncodified findings and declarations, this argument explained
that Proposition 162 would “prevent politicians from raiding the
pension funds” of retired public employees. (Ballot Pamp.,
supra, argument in favor of Prop. 162, p. 38.) In doing so, it
would also prevent future tax increases that could be needed to
pay back money “loot[ed]” from public pension funds. (Ibid.)
The argument against Proposition 162 did touch on salary
setting. It accused state retirement board members of
numerous abuses and asserted that Proposition 162 would give
these board members more power with less taxpayer oversight.
(Ballot Pamp., supra, argument against Prop. 162, p. 39.) The
argument then cited an example: “Last year, in the middle of a
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LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Opinion of the Court by Corrigan, J.
recession and a budget crisis, the PERS board voted to pay its
top bureaucrat $110,000 a year. The State Controller blocked
this pay increase, but would have no authority to stop other
outrageous salary hikes if Proposition 162 becomes law.” (Ibid.)
The proponents’ rebuttal argument did not engage directly with
this point, noting more generally that the initiative’s opponents
were “trying to mislead the voters.” (Ibid.) The rebuttal also
argued the measure did not “have anything to do with
retirement benefit levels.” (Ibid.) Finally, the rebuttal
responded to the argument’s broader point by stressing that
removing outside interference would protect pension funds,
guarding against attempts to redirect those funds and avoiding
the need for future tax increases. (Ibid.)
We have cautioned “that ballot measure opponents
frequently overstate the adverse effects of the challenged
measure, and that their ‘fears and doubts’ are not highly
authoritative in construing the measure.” (Legislature v. Eu
(1991) 54 Cal.3d 492, 505.) However, if an objection is conceded
by the initiative’s proponents or ignored in their rebuttal
argument, that circumstance may be relevant in discerning
voters’ understanding of a measure and their intent in adopting
it. (See ibid.; see also In re Gadlin (2020) 10 Cal.5th 915, 939–
940.) The opponents’ argument here was not ignored. The
rebuttal urged that opponents were “trying to mislead the
voters” and pointed out that Proposition 162 would not alter
benefit levels because “[o]nly legislative bodies . . . and voters
themselves have the power to set benefit levels.” (Ballot Pamp.,
supra, rebuttal to argument against Prop. 162, p. 39.) The
County notes that benefit levels are closely tied to employees’
salaries upon retirement. (See Alameda County, supra, 9
39
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Opinion of the Court by Corrigan, J.
Cal.5th at p. 1057.) Although a retirement benefit is not the
same thing as a salary, the argument spoke to the broader point
by refuting the opponents’ concern about retirement boards
having unilateral authority. Considered as a whole, the ballot
arguments do not demonstrate that voters intended to change
how retirement system employees are classified or
compensated.
4. Consistency with Other Laws
Finally, we consider whether inferring the authority
LACERA claims would be consistent with other laws that
govern public employment. Westly interpreted Proposition 162
in a manner that would avoid conflicting with the constitutional
civil service provisions governing state employment. (See
Westly supra, 105 Cal.App.4th at p. 1113.)14 We do the same.
14
Constitutional authority over state employees is vested in
the State Personnel Board, which is charged with enforcing and
administering the state civil service statutes. (Cal. Const.,
art. VII, § 3.) Unless specifically exempted, all state officers and
employees are included in the civil service system (id., § 1), thus
embedding in the Constitution “the principle that appointments
and promotions in state service be made solely on the basis of
merit” (Pacific Legal Foundation v. Brown (1981) 29 Cal.3d 168,
183–184 (Pacific Legal Foundation)). A bill passed after Westly
was decided allowed the CalPERS and CalSTRS boards to fix
the classification and compensation of their senior executives,
but it did not allow them to exempt these employees from civil
service entirely. (See Stats. 2003, ch. 856, §§ 1, subd. (e), 2,
subd. (c), 3, subd. (c), pp. 6263–6264.) This result is consistent
with the state’s superior authority under article VII to maintain
a civil service system. (See Westly, supra, 105 Cal.App.4th at
pp. 1103, 1113.)
40
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Opinion of the Court by Corrigan, J.
“In choosing between alternative interpretations of
constitutional provisions,” beyond analyses of the relevant text
and ballot materials, “we are further constrained by our duty to
harmonize various constitutional provisions [citation] in order
to avoid the implied repeal of one provision by another. Implied
repeals are disfavored. [Citation.] ‘So strong is the presumption
against implied repeals’ that we will conclude one constitutional
provision impliedly repeals another only when the more recently
enacted of two provisions constitutes a revision of the entire
subject addressed by the provisions.” (City and County of San
Francisco v. County of San Mateo (1995) 10 Cal.4th 554, 563; see
also Pacific Legal Foundation, supra, 29 Cal.3d at pp. 197, 199.)
To the extent possible, we must also “ ‘try to harmonize
constitutional language with that of existing statutes.’ ”
(Ruelas, supra, 15 Cal.5th at p. 979.) Because state and local
governments are given broad constitutional and statutory
authority over employment terms, the harmonization principle
requires that we construe Proposition 162 in a way that fits
within this existing scheme. “ ‘The inquiry is properly not so
much which statutory scheme prevails [over the other], but
rather how each can be harmonized to give them reasonable and
full effect.’ ” (Pacific Legal Foundation, at p. 197.)
Article XI’s home rule provisions grant county
governments power over the terms of county employment. In
charter counties, like Los Angeles, governing bodies “shall
provide” for “[t]he fixing and regulation . . . , by ordinance, of the
appointment and number of assistants, deputies, clerks,
attaches, and other persons to be employed” and must
“prescrib[e] and regulat[e] . . . the powers, duties, qualifications,
and compensation of such persons,” as well as the times and
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LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Opinion of the Court by Corrigan, J.
terms of their appointment “and the manner of their
appointment and removal.” (Cal. Const., art. XI, § 4, subd. (f);
see id. § 1, subd. (b) [granting similar authority to general law
counties].) These provisions long predated Proposition 162.
(See Cal. Const., art. XI, former § 5; see also County of Sonoma,
supra, 173 Cal.App.4th at pp. 337–338.) The constitutional
authority over compensation is also implemented by statute. To
this end, section 25300 states: “The board of supervisors shall
prescribe the compensation of all county officers, including the
board of supervisors, and shall provide for the number,
compensation, tenure, appointment, and conditions of
employment of county employees. Except as otherwise required
by Section 1 or 4 of article XI of the California Constitution, such
action may be taken by resolution of the board of supervisors as
well as by ordinance.”
The pertinent language of article XI “is quite clear and
quite specific.” (County of Riverside, supra, 30 Cal.4th at
p. 285.) It directs that “the county, not the state, not someone
else, shall provide for the compensation of its employees” as well
the terms of their employment. (Ibid.) This power has been
interpreted broadly. In County of Riverside, we held the
provision was violated by legislation requiring that counties
submit certain union negotiation issues to binding arbitration.
(Id. at pp. 282, 285–286; see County of Sonoma, supra, 173
Cal.App.4th at pp. 346–347 [finding amended version of the
statute unconstitutional for the same reason].) In an earlier
case, we concluded the constitutional home rule provisions for
charter cities and counties were violated by a statute that
withheld state surplus funds from local entities that gave their
employees cost-of-living or salary increases exceeding those
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OF LOS ANGELES
Opinion of the Court by Corrigan, J.
provided to state employees. (Sonoma County Organization of
Public Employees v. County of Sonoma (1979) 23 Cal.3d 296,
314–318.)
Our interpretation harmonizes section 17 with article XI’s
home rule provisions. Although Proposition 162 gave
retirement boards sweeping authority over all decisions
concerning the investment and management of fund assets, the
delivery of benefits and services, and the operation of the
retirement system itself, it did not convey authority over
employees’ civil service classification or compensation.
Consistent with article XI, the ultimate decisions on these
matters remain within counties’ longstanding control.
By contrast, accepting LACERA’s interpretation of
Proposition 162 would bring section 17 into direct conflict with
the home rule provisions, working an implied repeal of article
XI with respect to the compensation of county retirement system
employees. “There is a strong presumption against repeal by
implication. [Citation.] ‘ “Absent an express declaration of
legislative intent, we will find an implied repeal ‘only when
there is no rational basis for harmonizing the two potentially
conflicting statutes [citation], and the statutes are
“irreconcilable, clearly repugnant, and so inconsistent that the
two cannot have concurrent operation.” ’ ” ’ ” (Tuolumne Jobs &
Small Business Alliance v. Superior Court (2014) 59 Cal.4th
1029, 1039.) This principle also applies to conflicting
constitutional provisions, which must be harmonized to the
extent possible to avoid an implied repeal. (Board of Supervisors
v. Lonergan (1980) 27 Cal.3d 855, 868–869.)
The Court of Appeal addressed the tension between its
interpretation of section 17 and article XI’s home rule provisions
43
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OF LOS ANGELES
Opinion of the Court by Corrigan, J.
in two ways. First, it acknowledged the conflict and resolved it
by construing section 17 as an exception to the constitutional
home rule provisions. According to the Court of Appeal, while
county governments may generally have authority over
compensation for county employees, Proposition 162 created a
limited exception to this rule for employees of county retirement
systems. (Los Angeles County Retirement, supra, 102
Cal.App.5th at pp. 1213–1214; see Greene v. Marin County
Flood Control & Water Conservation Dist. (2010) 49 Cal.4th 277,
290.) For this interpretation, the court focused on section 17’s
introductory phrase, which states that its provisions apply
“[n]otwithstanding any other provisions of law or this
Constitution to the contrary.” (Cal. Const., art. XVI, § 17; see
Los Angeles Retirement, at p. 1213.)
Next, the Court of Appeal asserted that a conflict between
its interpretation of section 17 and article XI could be avoided
by narrowly interpreting counties’ home rule authority to
exclude retirement system employment. “ ‘[H]ome rule’
authority is limited to matters concerning the structure and
operation of local government.” (Dibb v. County of San Diego
(1994) 8 Cal.4th 1200, 1207.) The Court of Appeal observed that
“retirement systems are not county operations; they are
independent entities established by state legislation and
managed and administered by their boards, not by county
boards of supervisors or any other county entity.” (Los Angeles
County Retirement, supra, 102 Cal.App.5th at p. 1215.) Because
retirement systems are independent from counties, the court
reasoned, counties are given no constitutional authority over
their employees under article XI. As we explain, these attempts
at harmonization fail.
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OF LOS ANGELES
Opinion of the Court by Corrigan, J.
In at least one context, we have observed that a county
retirement system is “an independent entity” and “does not act
as agent for the county.” (Traub, supra, 34 Cal.3d at p. 798.)
For this reason, we held that the requisite privity does not exist
to bind a retirement board under res judicata principles to
judgments against the county. (Id. at pp. 798–799.) But an
entity’s independence from the county for privity, or some other
defined purpose, does not necessarily mean it is independent for
all purposes. For example, a district attorney acts as a state
official enforcing state policy when prosecuting Penal Code
violations, but district attorney compensation is nevertheless
prescribed by the county board of supervisors consistent with
home rule authority. (See Pitts v. County of Kern (1998) 17
Cal.4th 340, 361.) Similarly here, the Court of Appeal’s
characterization of county retirement systems as fully
independent oversimplifies the network of relationships
outlined in CERL. No case has ever held that employees of
county retirement systems are anything other than county
employees.15
15
The two cases the Court of Appeal relied on for this point
do not support a different conclusion. In Corcoran, supra, 60
Cal.App.4th 89, the question was whether the county’s
retirement board or its board of supervisors was the “ ‘governing
body’ ” for purposes of a former statute that restricted the
retirement benefits available to new hires. (Id. at p. 92.)
Though it held that the retirement board was the designated
governing body within the meaning of that statute, Corcoran
acknowledged that retirement system “employees are members
of the county civil service and paid according to county salary
schedules.” (Id. at p. 95.) Kern County Employees’ Retirement
Assn. v. Bellino (2005) 126 Cal.App.4th 781 (Kern County) is
similarly unavailing. There, a retirement system employee
45
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Opinion of the Court by Corrigan, J.
As we discuss in greater detail below, CERL specifically
provides that individuals who work for a county retirement
system “shall be county employees . . . and shall be included in
the salary ordinance or resolution adopted by the board of
supervisors for the compensation of county officers and
employees.” (§ 31522.1, italics added.) It also defines an
“ ‘[e]mployee’ ” covered by the act to include anyone “employed
by a county whose compensation is fixed by the board of
supervisors.” (§ 31469, subd. (a); see post, at pp. 51–52, 57–58.)
The plain meaning of these statutes is that retirement system
employees are county employees, a point LACERA does not
dispute. Accordingly, article XI gives county governing bodies
the home rule power to regulate the aspects of their employment
relevant here. (Cal. Const., art. XI, §§ 1, subd. (b), 4, subd. (f).)
The Court of Appeal asserted this constitutional
interpretation would call into question CERL statutes giving
retirement boards the power to “appoint” staff, administrators,
and various officers. (§ 31522.1; see §§ 315.22.2–31522.4; Los
Angeles County Retirement, supra, 102 Cal.App.5th at p. 1216.)
These provisions would be “constitutionally suspect,” the court
sought to assume a seat on the county retirement board despite
a non-CERL statute (§ 53227) prohibiting local agency
employees from sitting on their agency’s governing board. (Kern
County, at pp. 785–786.) The court rejected the employee’s
argument that he was employed solely by the county, reasoning
instead that the retirement system was “an additional
employer” for purposes of section 53227. (Kern County, at p.
790; see id. at pp. 788–790.) Considered in context, both cases
are consistent with our determination that retirement system
employees are county employees for purposes of classification
and compensation.
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Opinion of the Court by Corrigan, J.
reasoned, “because an ‘express grant of authority to the county
necessarily implies the Legislature does not have that
authority.’ ” (Los Angeles County Retirement, at p. 1215,
quoting County of Riverside, supra, 30 Cal.4th at p. 285.) The
short answer to this argument is that the pension
administration laws established in CERL are “optional.”
(Alameda County, supra, 9 Cal.5th at p. 1055.) CERL
establishes a public pension system that counties may choose to
adopt. (Alameda County, at p. 1055.) The Legislature cannot
compel them to do so. In fact, more than half of California’s
counties have elected otherwise. (See ibid.) However, the
counties that “have chosen to implement their pension plans
under CERL” agreed to be bound by its provisions. (Ibid.)16
Under this arrangement, the retirement board has the power to
hire necessary staff, but it does not have final authority to decide
their compensation. Each of the statutes mentioned by the
Court of Appeal specifies that personnel appointed by the boards
“shall be county employees . . . and shall be included in the
salary ordinance or resolution adopted by the board of
supervisors for the compensation of county officers and
employees.” (§ 31522.1; see §§ 31522.2, 31522.3, subd. (a),
31522.4, subd. (a).)
Accordingly, we conclude Westly’s interpretation best
harmonizes section 17 with other constitutional provisions. A
retirement board’s “plenary authority” over “administration of
16
By enacting Los Angeles County Code section 5.20.010,
the Board of Supervisors accepted “all and every one” of CERL’s
provisions and made them applicable to all those employed by
the County “who are now or hereafter” eligible for retirement
benefits under CERL. (See ante, at p. 6, fn. 2.)
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Opinion of the Court by Corrigan, J.
the system” (Cal. Const., art. XVI, § 17) extends to the
management and investment of the system’s assets, actuarial
services, and “the protection and delivery of the assets, benefits,
and services for which the [b]oard has a fiduciary responsibility”
(Westly, supra, 105 Cal.App.4th at p. 1110). But it does “not
encompass areas not expressly dedicated to the board” (City of
San Diego, supra, 186 Cal.App.4th at p. 79), including the power
to set job classifications or compensation for retirement system
employees. This interpretation honors the plain language of
section 17, is consistent with Proposition 162’s ballot materials,
and avoids a conflict with the home rule provisions of article XI
and other constitutional provisions. (See Westly, at pp. 1103,
1113–1114 [concluding a broad interpretation of section 17
would conflict with state’s article VII authority over civil
service].)
This narrower interpretation is also consistent with our
analysis in Alameda County, supra, 9 Cal.5th 1032, which
considered whether county retirement boards may agree to pay
benefits beyond those authorized in CERL. While
acknowledging that section 17 grants retirement boards
“plenary authority” over “administration of the system” (Cal.
Const., art. XVI, § 17), we concluded this administrative
authority was bounded by “the design enacted by the
Legislature through CERL” (Alameda County, at pp. 1066–
1067). Quoting Westly, supra, 105 Cal.App.4th at page 1100, we
explained that county retirement “boards do not have the
authority to ‘evade the law’ that otherwise applies to their
system.” (Alameda County, at p. 1067.) Although they may
“interpret CERL’s provisions as necessary to perform their
administrative functions,” county retirement boards “have no
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OF LOS ANGELES
Opinion of the Court by Corrigan, J.
authority to adopt or act on an interpretation that is
inconsistent with those provisions.” (Ibid.)
Our decision in Alameda County thus interpreted
retirement boards’ “plenary authority” under section 17
narrowly. The provision had to be harmonized with existing
laws, including the CERL statutes governing county retirement
systems. While it is beyond dispute that providing benefits is a
core function of retirement systems, we held that county
retirement boards are not free to administer benefits in any way
they want. Their exercise of this administrative power must be
consistent with CERL. (Alameda County, supra, 9 Cal.5th at
pp. 1066–1067.) The same principle applies here in regard to
the classification and compensation of retirement system
employees: To the extent retirement boards’ constitutional
authority over administration encompasses this subject, that
authority must be exercised within the limitations imposed by
the governing law. As the next section will discuss, CERL
directs that retirement system personnel are county employees
subject to the county’s salary-fixing authority. (See § 31522.1.)
In addition to the constitutional home rule provisions, our
interpretation thus harmonizes section 17 with CERL,
consistent with the reasoning of Alameda County.
B. Impact of Statutes Governing County Retirement Systems
As a corollary to its constitutional arguments, LACERA
contends the CERL statutes require that county boards of
supervisors must automatically implement the staffing
decisions reached by retirement boards exercising their “plenary
authority.” (Cal. Const., art. XVI, § 17.) It further urges that,
even if the electorate did not shift salary and classification
authority by enacting Proposition 162, the Legislature achieved
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Opinion of the Court by Corrigan, J.
the same result by amending certain CERL provisions. These
arguments fail. Again, historical context is important.
Building on its interpretation of Proposition 162, the
Court of Appeal held that counties have a mandatory duty to
implement the classification and compensation decisions of
retirement boards because CERL statutes require that their
employees’ salaries be included in the county’s salary ordinance
or resolution. (Los Angeles County Retirement, supra, 102
Cal.App.5th at pp. 1218–1219.) As explained, the court’s
understanding was premised on an overly broad view of
retirement boards’ constitutional authority. A more
straightforward reading of the relevant statutes and legislative
history indicates that, while retirement boards have the power
to hire necessary staff, the employees they hire remain subject
to county civil service rules and the county’s salary-setting
authority.
Statutory analysis mirrors the approach employed for
interpreting ballot initiatives. (C.B., supra, 6 Cal.5th at p. 125.)
“ ‘Our fundamental task is to ascertain the Legislature’s intent
and effectuate the law’s purpose, giving the statutory language
its plain and commonsense meaning. [Citation.] We examine
that language in the context of the entire statutory framework
to discern its scope and purpose and to harmonize the various
parts of the enactment.’ [Citation.] If the language is clear, ‘ “its
plain meaning controls. If, however, the language supports
more than one reasonable construction, then we may look to
extrinsic aids, including the ostensible objects to be achieved
and the legislative history.” ’ ” (Stone v. Alameda Health System
(2024) 16 Cal.5th 1040, 1052.)
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OF LOS ANGELES
Opinion of the Court by Corrigan, J.
1. CERL Background
Three statutes are relevant to the issue here. First, since
1947, section 31469 has defined the term “employee” for
purposes of CERL. (Stats. 1947, ch. 424, § 1, p. 1265.) It states:
“ ‘Employee’ means any officer or other person employed by a
county whose compensation is fixed by the board of
supervisors[,] or by statute[,] and whose compensation is paid
by the county, and any officer or other person employed by any
district within the county.” (§ 31469, subd. (a).)17
Section 31469’s definition is important because it identifies the
public employees who are eligible to participate in a CERL
system. (Holmgren, supra, 159 Cal.App.4th at p. 605.) The
parties do not dispute that retirement system staff are
“ ‘[e]mployee[s]’ ” within the meaning of section 31469,
subdivision (a) and entitled to CERL pension benefits. (See
Holmgren, at p. 603.)
Two other relevant statutes were enacted in 1973 by
Assembly Bill No. 470 (1973–1974 Reg. Sess.). Previously, all
retirement system administrative costs were paid from counties’
general funds (Legis. Analyst, analysis of Assem. Bill No. 470
(1973–1974 Reg. Sess.) June 25, 1973, p. 45) and all retirement
system staff were appointed by, and worked under the direction
17
A related statute designates four specified retirement
systems as districts separate from the county (see § 31468,
subd. (l)), but LACERA is not one of them. The retirement
systems designated as districts are those of Orange County, San
Bernardino County, Contra Costa County, and Ventura County.
(§ 31468, subd. (l).) The “district” definition is consistent with
the different treatment for these county systems elsewhere in
CERL. (See §§ 31522.5, 31522.7, 31522.9–31522.11; see also
post, at pp. 65–67.)
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Opinion of the Court by Corrigan, J.
of, the county treasurer and board of supervisors (see Assem.
Retirement Com., Analysis of Assem. Bill No. 470 (1973–1974
Reg. Sess.) as introduced Feb. 26, 1973; Agriculture and
Services Com., Enrolled Bill Rep. on Assem. Bill No. 470 (1973–
1974 Reg. Sess.) July 5, 1973, p. 1). The Legislature changed
both of these practices by passing Assembly Bill No. 470 to add
sections 31580.2 and 31522.1 to the CERL statutory scheme.
(Stats. 1973, ch. 269, §§ 1–2, p. 665.)
Section 31580.2 changed the source of retirement system
administrative funding. Rather than continue to cover
administrative costs from the county general fund,
section 31580.2 provided that “the entire expense of
administration of the retirement system shall be charged
against the earnings of the retirement fund.” (Former
§ 31580.2; Stats. 1973, ch. 269, § 2, p. 665; see Assem.
Retirement Com., Analysis of Assem. Bill No. 470, supra, as
introduced Feb. 26, 1973.)
Section 31522.1 modified the approach to hiring and
oversight of retirement system employees. As first enacted,
section 31522.1 stated: “Both the board of retirement and the
board of investment may appoint such administrative,
technical, and clerical staff personnel as are required to
accomplish the necessary work of the boards. The appointments
shall be made from eligible lists created in accordance with the
civil service or merit system rules of the county in which the
retirement system governed by the boards is situated. The
personnel shall be subject to the county civil service or merit
system rules and shall be included in the salary ordinance or
resolution adopted by the board of supervisors for the
compensation of county officers and employees.” (Stats. 1973,
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Opinion of the Court by Corrigan, J.
ch. 269, § 1, p. 665.) In 1979, the last sentence of
section 31522.1 was amended to read: “The personnel shall be
county employees and shall be subject to the county civil service
or merit system rules and shall be included in the salary
ordinance or resolution adopted by the board of supervisors for
the compensation of county officers and employees.” (§ 31522.1,
italics added; see Stats. 1979, ch. 55, § 1, p. 136.) As we explain,
the effect of the 1979 amendment was to clarify that, even
though the retirement board decides whom to hire from the
county lists, those hired are still county employees.
Section 31522.1 is of particular importance. Accordingly,
like the parties and the Court of Appeal, we focus primarily on
this provision.
2. Text of Section 31522.1
The language of section 31522.1 breaks down into three
separate parts. First, county retirement boards have the
authority to “appoint,” or hire, the personnel needed “to
accomplish the necessary work of the boards.” (§ 31522.1.)
Second, any such appointment must be made “from eligible lists
created in accordance with the [county’s] civil service or merit
system rules.” (Ibid.) Third, personnel appointed by county
retirement boards “shall be county employees,” “shall be subject
to the county civil service or merit system rules[,] and shall be
included in the [county’s] salary ordinance.” (Ibid.) Both sides
agree that retirement boards may determine what staff they
need and may appoint them as the statute provides. Both sides
also agree that staff must be hired from county civil service lists
and that, once hired, staff are subject to the county’s civil service
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Opinion of the Court by Corrigan, J.
rules.18 The parties disagree about whether the boards’
appointment power includes authority over classification and
salary setting. They also disagree about the significance of
staff’s designation as “county employees” and of the requirement
that they “be included in the [county’s] salary ordinance.”
(§ 31522.1.)
As the trial court observed, there are two equally plausible
readings of the statutory language. The first would be that
retirement boards’ appointment power necessarily includes the
power “to determine job responsibilities and reporting
relationships of the appointed employees [i.e., their
classification]” and to set their salaries. (Los Angeles County
Retirement, supra, 102 Cal.App.5th at p. 1219.) The Court of
Appeal adopted this interpretation. It reasoned that retirement
boards are the appropriate party to decide what civil service
classifications are needed “because boards of supervisors have
no knowledge of or supervisory authority over the necessary
work of retirement boards.” (Ibid.) Its interpretation of salary-
setting authority was similar. It concluded section 31522.1’s
directive that personnel appointed by retirement boards “ ‘shall
be included in the salary ordinance or resolution adopted by the
board of supervisors’ ” created “a mandatory duty for boards of
supervisors to include in the relevant county’s salary ordinance
18
This concession is at odds with LACERA’s constitutional
argument. If Proposition 162 gave retirement boards complete
authority over the hiring of retirement system staff, this
constitutional authority would override CERL’s directive that
the employees be subject to county civil service rules. Our
interpretation of article XVI, section 17 avoids this problematic
result.
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Opinion of the Court by Corrigan, J.
the salaries adopted by a retirement board for its appointees.”
(Los Angeles County Retirement, at pp. 1218–1219, italics
omitted.) The court found support for this interpretation in
section 31580.2, which changed retirement system budgeting to
charge all system administrative expenses, including
compensation, against fund earnings. The appellate court
reasoned that retirement boards need to know what salaries
they will be paying in order to create a budget, and they must
have control over setting those salaries in order to control the
budget and honor their fiduciary duties to system members.
(Los Angeles County Retirement, at p. 1220.)
The first assertion is undoubtedly correct. A responsible
budgeting process accounts for all anticipated expenses. The
second is not necessarily so. Policy decisions as to classification
and salary levels involve broader considerations than just the
source of funding and the details of efficient operation.
Classification and salary-level decisions are integral to the
whole civil service system. As a result, constitutional and
legislative determinations dictate who is ultimately authorized
to set salaries for civil service employees. In the case of county
employees, that authority is given to the county governing
board, such as a board of supervisors. (Cal. Const., art. XI, §§ 1,
subd. (b), 4, subd. (f).) This allocation of responsibility ensures
that an elected body is responsible for managing the county
budget and honoring the civil service mandates that promote
fairness in the workplace and seek to ensure that all
governmental employees are fairly and uniformly paid.
While retirement boards are given authority to “appoint”
staff, the statute makes clear that these employees must be
hired “from eligible lists created in accordance with the civil
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OF LOS ANGELES
Opinion of the Court by Corrigan, J.
service or merit system rules of the county” and, once hired,
must “be subject to the county civil service or merit system
rules.” (§ 31522.1, italics added.) Job classifications are an
inherent part of the civil service rules created by counties, for
all county employees. Section 31522.1 expressly requires that
retirement system personnel be part of that system. The statute
says nothing about giving retirement boards the power to
establish new classifications within the county’s civil service
system or to dictate, without county input, the classifications
into which retirement system staff will be hired. Further,
section 31522.1’s requirement that retirement system personnel
“shall be included in the salary ordinance or resolution adopted
by the board of supervisors” need not be read as compelling
boards of supervisors to merely accept and implement the salary
recommendations of retirement boards. On the contrary, as the
County argues, this directive is also consistent with the
understanding of retirement system staff as “county employees”
(§ 31522.1), whose salaries must be prescribed by ordinance
according to longstanding constitutional and statutory
provisions (Cal. Const., art. XI, §§ 1, subd. (b), 4, subd. (f);
§ 25300).19
19
Despite section 31522.1’s clear designation of them as
such, the dissent contends retirement system personnel are not
“county employees” for classification and compensation
purposes because this reading would render redundant the
statute’s further directive that they “be included in the salary
ordinance or resolution adopted by the board of supervisors for
the compensation of county officers and employees.” (§ 31522.1;
see dis. opn. of Groban, J., post, at pp. 22–23.) But this
language, which also appears in statutes addressing the
appointment of executive personnel (see §§ 31522.2–31522.4),
simply tracks CERL’s definition of an “ ‘[e]mployee’ ” eligible to
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OF LOS ANGELES
Opinion of the Court by Corrigan, J.
Section 31522.1 itself does not directly speak to which
entity is responsible for determining job classifications and
salary levels. However, this case requires us to discern its
meaning on the question in the context of the entire statutory
and constitutional framework. (See Professional Engineers,
supra, 40 Cal.4th at p. 1037.) We conclude the County’s
interpretation of the statute’s meaning is most consistent with
CERL as a whole and the relevant constitutional provisions
bearing on public employment.
As discussed, the Constitution gives counties full
authority to set job requirements and compensation for their
employees. As a charter county, Los Angeles, through its Board
of Supervisors, has constitutional authority to “prescrib[e] and
regulat[e] . . . the powers, duties, qualifications, and
compensation” of County employees. (Cal. Const., art. XI, § 4,
subd. (f); see § 25300.) Consistent with these provisions, CERL
defines “ ‘[e]mployee,’ ” in part, as a person employed by the
county “whose compensation is fixed by the board of supervisors
or by statute.” (§ 31469, subd. (a).) Read in light of this
definition and of counties’ constitutional authority,
receive retirement benefits as someone “employed by a county
whose compensation is fixed by the board of supervisors or by
statute.” (§ 31469, subd. (a); see post, at pp. 61–62.) As we have
explained, the statutory construction rule to avoid surplusage
“means surplusage as to other statutory language, not as to some
possible judicial interpretation.” (Reno v. Baird (1998) 18
Cal.4th 640, 658.) While applicable law does appear to require
the inclusion of county employees’ compensation in a salary
ordinance or resolution, and a court would likely so conclude,
“the Legislature may choose to state all applicable legal
principles in a statute rather than leave some to even a
predictable judicial decision.” (Ibid.)
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section 31522.1’s statement that retirement system personnel
“shall be county employees and shall be subject to the county
civil service or merit system rules and shall be included in the
salary ordinance or resolution adopted by the board of
supervisors” is most reasonably understood to mean that, as
with all other county employees, the staff appointed by
retirement boards are subject to civil service classifications set
by the county, with salaries included in the county’s salary
ordinance. The first sentence of section 31522.1 gives
retirement boards the power to appoint their own staff. But in
neither the remaining text of that statute, nor in any other
CERL provision, is there a basis for concluding that the
Legislature intended to remove classification and salary-setting
powers from counties and give them to retirement boards
instead.
This conclusion is consistent with other decisions that
have considered the status of retirement system employees. For
example, a 1986 Attorney General opinion observed that the
expanded autonomy granted by sections 31522.1 and 31580.2
did “not mean that the retirement system will no longer be a
part of county government. It will remain an integral part
thereof.” (70 Ops.Cal.Atty.Gen. 277, 278–279 (1987).) And in
Kern County, supra, 126 Cal.App.4th 781, there was no dispute
that a “nonmanagement employee” of a retirement system was
a “county civil service employee.” (Id. at p. 785; see id. at
p. 789.) The only question in Kern County was whether the
county employee was also a retirement system employee who,
for that reason, would be barred from holding a position on the
retirement board. (See id. at pp. 788–790.)
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OF LOS ANGELES
Opinion of the Court by Corrigan, J.
It is true that appellate decisions have not regarded
retirement system staff as county employees for all purposes.
The personnel whose salaries are at issue here are employees
who do work for the retirement system. Thus, under Kern
County, the retirement system is an “additional employer.”
(Kern County, supra, 126 Cal.App.4th at p. 790.) But that
reality does not mean retirement system staff are not also
county employees, as the CERL statutes require. Similarly, the
Court of Appeal in Corcoran held that a retirement board, and
not the county board of supervisors, was the “governing body”
empowered to determine the tier of retirement benefits for
system employees, while at the same time it acknowledged that,
as to their salary, the “employees are members of the county
civil service and paid according to county salary schedules.”
(Corcoran, supra, 60 Cal.App.4th at p. 95.) These decisions do
not establish that retirement boards have the sole authority to
set civil service classifications or salaries for their staffs, as
LACERA argues. They merely illustrate the complex
interrelationship of county governments and retirement boards,
both of which have roles to play under CERL in the hiring and
compensation of retirement system personnel.
In reaching a contrary conclusion, the Court of Appeal
here determined that the only significance of the amendment to
section 31522.1’s final sentence, stating that retirement system
staff “shall be county employees . . . included in the salary
ordinance,” was to impose a mandatory duty on boards of
supervisors to implement retirement board compensation
decisions in the county’s salary ordinance. (Los Angeles County
Retirement, supra, 102 Cal.App.5th at p. 1218, italics omitted.)
The court’s interpretation rested in part on the statute’s use of
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Opinion of the Court by Corrigan, J.
the word “shall” in directing that retirement system personnel
“shall be included in the salary ordinance or resolution adopted
by the board of supervisors.” (§ 31522.1; see Los Angeles County
Retirement, at p. 1219.)
A number of decisions have acknowledged that the term
“shall” can have various meanings, particularly when
determining whether a provision is mandatory, thus making it
enforceable by writ of mandate. Although courts “ ‘ordinarily’
construe . . . the word ‘shall’ as mandatory,” we have explained
that the Legislature’s use of this word “is merely indicative, not
dispositive or conclusive” on the question whether a mandatory
duty has been imposed. (Tarrant Bell Property, LLC v. Superior
Court (2011) 51 Cal.4th 538, 542; see Guzman v. County of
Monterey (2009) 46 Cal.4th 887, 899.) The word “shall” may be
intended to impose a mandatory duty, or it may signify “a mere
obligation to perform a discretionary function.” (Creason v.
Department of Health Services (1998) 18 Cal.4th 623, 631.) But
even assuming “shall” created a mandatory duty here, the Court
of Appeal’s analysis failed to focus on just what mandatory duty
section 31522.1 imposed. The statute directs boards of
supervisors to include the salaries of retirement system staff in
the county’s salary ordinance. That budgetary inclusion duty is
mandatory. But, as explained, section 31522.1 did not change
the law regarding which entity is authorized to set those
salaries. The appellate court interpreted section 31522.1 to
require that counties include the salaries of retirement system
staff as set by the retirement board, yet those words appear
nowhere in the statute. It is axiomatic that courts “may not
rewrite [a] statute to conform to an assumed intention that does
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Opinion of the Court by Corrigan, J.
not appear in its language.” (Vasquez v. State of California
(2008) 45 Cal.4th 243, 253.)
The Court of Appeal’s interpretation is also at odds with
the settled rule that “fixing compensation is legislative in
character” and as such is a discretionary act. (Bagley, supra, 18
Cal.3d at p. 25; see Kugler v. Yocum (1968) 69 Cal.2d 371, 374.)
The appellate court responded to this point by asserting that
county boards of supervisors have no such discretion because all
decisions about compensation are solely for retirement boards to
make. (Los Angeles County Retirement, supra, 102 Cal.App.5th
at p. 1220.) But the argument is circular. It simply asserts that
the board of supervisors has no discretion because it has no
discretion. In any event, if the Legislature had intended to
remove a board of supervisors’ discretionary “legislative”
(Bagley, at p. 25) power to determine compensation, one would
expect this intent to be clearly indicated in the statutory text. It
is not.
Finally, one other CERL statute requires clarification.
Section 31469 defines who is an “employee” entitled to receive
retirement benefits in a CERL system. (See Holmgren, supra,
159 Cal.App.4th at p. 603.) Since its enactment in 1947, the
applicable provision of that statute has defined “ ‘[e]mployee’ ”
as someone “employed by the county whose compensation is
fixed by the board of supervisors or by statute and whose
compensation is paid by the county.” (§ 31469, subd. (a), italics
added; see Stats. 1947, ch. 424, § 1, p. 265.) When
section 31580.2 was enacted decades later in 1973 to provide
that all administrative expenses be paid from retirement fund
earnings, the italicized phrase no longer accurately described
retirement system employees because, going forward, their
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Opinion of the Court by Corrigan, J.
compensation was to be paid not from the county’s general fund
but by the retirement system itself. (See Corcoran, supra, 60
Cal.App.4th at p. 94.) Any uncertainty this change created was
rectified in 1979 when the Legislature passed an urgency
measure amending section 31522.1 to add that staff appointed
by retirement boards “shall be county employees.” (Stats. 1979,
ch. 55, § 1, p. 136.) The amendment was described as
“nonsubstantive and . . . only intended to clarify the[] status” of
retirement system employees. (Off. of Employee Relations,
Enrolled Bill Rep. on Assem. Bill No. 132 (1978–1979 Reg. Sess.)
May 8, 1979, p. 1, italics added.)
LACERA argues this history shows that the Legislature’s
sole purpose in designating retirement system staff “county
employees” in section 31522.1 was to clarify their eligibility for
retirement benefits under section 31469. But the Legislature
employed broader language than that mentioned by LACERA.
It did not amend section 31522.1 to say that retirement system
staff are county employees only for purposes of section 31469.
LACERA’s interpretation invites us to read in a limitation that
is not present in the statutory language. Again, “[i]t is not for
us to insert a limitation the Legislature excluded. [Citation.] A
court ‘may not rewrite a statute, either by inserting or omitting
language, to make it conform to a presumed intent that is not
expressed.’ ” (Kaanaana v. Barrett Business Services, Inc.
(2021) 11 Cal.5th 158, 171.)
The amendment to section 31522.1 provided, without
limitation, that retirement system personnel “shall be county
employees” (§ 31522.1), in a change that was described as
“nonsubstantive” (Off. of Employee Relations, Enrolled Bill Rep.
on Assem. Bill No. 132, supra, p. 1). The County reasonably
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Opinion of the Court by Corrigan, J.
reads this history to mean that the Legislature has always, and
continues to, regard retirement system staff as county
employees, subject to the county’s civil service rules and salary-
setting authority. The amendment was adopted to remove any
confusion that might arise in light of section 31580.2’s change to
the funding source of retirement systems’ administrative costs.
The County’s interpretation is most consistent with the relevant
statutory text.20
3. Legislative History
The legislative history of Assembly Bill No. 470, which
enacted section 31522.1, is not extensive on the issue before us.
But it appears the Legislature intended that counties retain
20
Moreover, the County points out that, for retirement
system participation, CERL defines an “ ‘[e]mployee’ ” as both a
“person employed by a county whose compensation is fixed by
the board of supervisors or by statute and whose compensation
is paid by the county and any officer or other person employed
by any district in the county.” (§ 31469, subd. (a), italics added.)
If the Legislature had intended to remove salary-fixing
authority from county boards of supervisors, it could have
specified that retirement system staff were employees, not of the
county, but of a “district in the county.” (Ibid., italics added.) As
we will discuss, this is exactly the solution the Legislature
employed for a handful of retirement systems that have specific
authorization to operate independently from their counties.
(See post, at pp. 65–70.) The designation makes employees of
these retirement systems eligible for benefits under CERL even
though, as employees of a “district,” they are not county
employees, and their compensation is not fixed by their county
boards of supervisors. (See §§ 31469, subd. (a), 31522.5,
subd. (b), 31522.7, subd. (b), 31522.9, subd. (a), 31522.10,
subd. (b)(1), 31522.11, subd. (b).) If LACERA’s interpretation of
section 35122.1 were correct, none of this county-specific
legislation would have been necessary.
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their longstanding classification and salary-setting authority
over retirement system personnel.
One enrolled bill report explained that, though the
“appointment of employees [fell] within the jurisdiction of the
Board of Supervisors[,] as in other county departments,”
Assembly Bill No. 470 “would vest such appointing authority in
[retirement system] boards subject however, to county civil
service and salary fixing authority.” (Agriculture and Services
Agency, Enrolled Bill Rep. on Assem. Bill No. 470, supra, at p. 1,
italics added.) This report thus confirmed that retirement
system staff would remain county employees and the bill would
preserve counties’ traditional “salary fixing authority.” (Ibid.)
“[W]e have routinely found enrolled bill reports, prepared by a
responsible agency contemporaneous with passage and before
signing, instructive on matters of legislative intent.” (Elsner v.
Uveges (2004) 34 Cal.4th 915, 934, fn. 19; see Committee for
Green Foothills v. Santa Clara County Bd. of Supervisors (2010)
48 Cal.4th 32, 49–50 & fn. 15.)
More importantly, nothing in the legislative history
reflects an intent to remove counties’ longstanding control over
salary setting or to impose a mandatory duty on county boards
of supervisors to merely accept and implement retirement
boards’ salary determinations. After Assembly Bill No. 470’s
passage, county treasurers urged the governor to veto the bill
because it removed their power to appoint those overseeing
retirement system budgets. (See, e.g., James A. Hayes, County
of Los Angeles Board of Supervisors, letter to Governor Ronald
Reagan, July 10, 1973; Harold J. Ostly, State Assn. of County
Retirement System Administrators, letter to Governor Ronald
Reagan, July 10, 1973.) Opposition letters also complained
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Opinion of the Court by Corrigan, J.
about consequences that could result from counties’ loss of
control over appointments (see, e.g., President Charles J. Pesce,
State Assn. of County Treasurers, letter to Governor Ronald
Reagan, July 3, 1973) and the large budgets of retirement
systems (see, e.g., Robert L. Citron, Orange County Tax
Collector-Treasurer, letter to Governor Ronald Reagan, July 6,
1973). However, not one letter, nor any other recorded
opposition, expressed a concern that counties would lose control
over fixing the salaries of retirement system employees or would
be forced to implement the salary determinations made by
retirement boards.21
4. Subsequent Legislation Creating Retirement System
Districts
Section 31522.1’s intended meaning is also illuminated to
some degree by later enactments that carve out exceptions for
specific retirement systems. The Legislature’s consistent
21
The one letter that appears to have been distributed to
legislators, from County Treasurer and Tax Collector Harold J.
Ostly (Harold J. Ostly, County of Los Angeles Office of the
Treasurer and Tax Collector, letter to Assemblyman Bob
Wilson, April 17, 1973 (Ostly letter)) did not “argue[] that
retirement board members lacked the ‘expertise’ to decide what
personnel were necessary to administer the retirement system”
or “contend[] that county treasurers were better equipped to
carry out such duties.” (Dis. opn. of Groban, J., post, at p. 16.)
The letter did not mention personnel decisions at all. Instead,
it complained about the potential inefficiency it claimed could
result from asking retirement board members, who might lack
an administrative background, to shoulder an “added
administrative burden” while county treasurers remained
responsible for administration of the retirement system as a
whole. (Ostly letter, p. 1.)
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Opinion of the Court by Corrigan, J.
understanding of a prior statute, while not binding, is entitled
to due consideration. (See Jarman v. HCR ManorCare, Inc.
(2020) 10 Cal.5th 375, 389; Western Security Bank v. Superior
Court (1997) 15 Cal.4th 232, 244.) Legislative developments
following the enactment of sections 31522.1 and 31580.2
consistently display an understanding that, absent a specific
exception, county governments have final authority over the
classification and compensation of retirement board personnel.
In 2002, the Legislature passed laws applicable to Orange
County alone. First, the Legislature added section 31522.5,
which permitted Orange County’s retirement board to appoint
an administrator and certain executive staff who,
“[n]otwithstanding any other provision of law, . . . may not be
county employees but shall be employees of the retirement
system, subject to terms and conditions of employment
established by the board of retirement.” (Stats. 2002, ch. 74, § 2,
p. 590, italics added.) At the same time, it amended
section 31468 to define the Orange County retirement system as
a “district” (Stats. 2002, ch. 74, § 1, p. 590), thus enabling these
specific employees to be eligible for CERL benefits even though
their compensation is not “fixed by the [county] board of
supervisors or by statute” (§ 31469, subd. (a)).
After a series of amendments, section 31522.5 now applies
to the San Bernardino County retirement system and a new
statute, section 31522.11, governs the Orange County system.
Over the next several years, similar legislation created district
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Opinion of the Court by Corrigan, J.
status for the retirement systems of Contra Costa (§ 31522.9),22
Ventura (§ 31522.10), and San Bernardino (§§ 31522.5, 31522.7)
counties. All of these district-creating statutes provide that the
staff members in question “shall not be county employees but
shall be employees of the retirement system.” (§ 31522.10,
subd. (b)(1), italics added; see §§ 31522.5, subd. (b), 31522.7,
subd. (b), 31522.9, subd. (a), 31522.11, subd. (b).) Each of these
four retirement systems has also been specifically designated a
“ ‘[d]istrict’ ” under CERL. (§ 31468, subd. (l).)
Legislative history confirms that these new laws were
specifically intended to shift control over compensation, at least
for some executive personnel, from the counties to their
retirement boards. It also makes clear that the affected
personnel are not civil service employees of the county. For
example, when the first bill was under consideration, a letter to
the Senate Public Employment and Retirement Committee
Chair advised that it would give the retirement board “the
flexibility to create specific job descriptions, recruit and retain
specially trained pension professionals and set compensation
levels commensurate with industry standards.” (Keith Bozarth,
Orange County Employees Retirement System, letter to Sen.
Nell Soto re Assem. Bill No. 1992 (2001–2002 Reg. Sess.) May
24, 2002.) Committee reports stated the bill would exempt
certain employees from county civil service and would make
their compensation an expense of the retirement system. (Sen.
Public Employment and Retirement Com., Analysis of Assem.
22
The Contra Costa County statute is not limited to
executives but applies to all staff of the retirement system.
(§ 31522.9, subd. (a).)
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Opinion of the Court by Corrigan, J.
Bill No. 1992 (2001–2002 Reg. Sess.) June 10, 2002, p. 2.) They
also noted supporters’ belief that the bill would give the
retirement system the flexibility needed to hire and retain
professional staff. (Ibid.) An enrolled bill report concerning the
San Bernardino legislation explained that, by reclassifying the
system as a “district” independent from the county, the
retirement board would be able to pay its investment managers
higher salaries. (Off. of Planning and Research, Enrolled Bill
Rep. on Sen. Bill 777 (2005–2006 Reg. Sess.) Aug. 28, 2006,
pp. 1, 2, 4.) Similar statements appear in committee reports for
other bills. (See, e.g., Assem. Com. on Public Employees,
Retirement, and Social Security, Rep. on Assem. Bill No. 1291
(2015–2016 Reg. Sess.) May 6, 2015, p. 2; Sen. Rules Com., Off.
of Sen. Floor Analyses, 3d reading analysis of Assem. Bill
No. 1291 (2015–2016 Reg. Sess.) as amended May 27, 2015, p. 4;
Sen. Com. on Labor, Public Employment & Retirement,
Analysis of Assem. Bill No. 761 (2021–2022 Reg. Sess.) June 7,
2021, p. 2.)23
Some committee reports also reflect an understanding
that, in the absence of specific legislation, counties retain control
23
The Court of Appeal discounted the significance of the
county-specific statutes, asserting they were “likely . . .
precipitated by the litigation in Westly.” (Los Angeles County
Retirement, supra, 102 Cal.App.5th at p. 1227.) Yet no mention
of the Westly decision is to be found in the legislative history of
these several bills. Similarly, the dissent offers no contrary
explanation for the district-creating laws beyond speculating
that the Legislature “may well have” wanted “to remove any
uncertainty” as to retirement boards’ authority under existing
law. (Dis. opn. of Groban, J., post, at p. 37.) The Legislature did
not express such an intent. Further, why such a clarification
would be given only to four specific counties is left unexamined.
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Opinion of the Court by Corrigan, J.
over compensation decisions. For example, one report explains
that, under existing law, retirement system employees’
compensation is “limited to the county’s salary ordinance.” (Sen.
Com. on Labor, Public Employment & Retirement, Analysis of
Assem. Bill No. 761, supra, p. 2.) Another states that existing
law provides that retirement system employees are “subject to
the county civil service or merit system rules adopted by the
board of supervisors for the compensation of county officers and
employees.” (Sen. Rules Com., Off. Sen. Floor Analyses, 3d
reading analysis of Sen. Bill No. 673 (2013–2014 Reg. Sess.) as
amended Jan. 23, 2014, p. 2.)24
24
As evidence of a contrary understanding, the dissent
quotes from a committee report on the Contra Costa bill that,
“[u]nder existing law, the [Contra Costa Employees Retirement
Association] has authority to establish compensation for
retirement system employees,” whereas “the Board of
Supervisors has responsibility to establish civil service rules
and enter [Memoranda of Understanding] for all county
employees, and the Auditor-Controller provides payroll and
oversight services.” (Sen. Public Employment & Retirement
Com., Analysis of Sen. Bill No. 673 (2013–2014 Reg. Sess.) as
amended Jan. 6, 2014, p. 3; see dis. opn. of Groban, J., post, at
pp. 37–38.) However, this statement appears in a section of the
report discussing the claims in a lawsuit that ultimately gave
rise to the legislation in question. (See Sen. Public Employment
& Retirement Com., Analysis of Sen. Bill No. 673, supra, at p. 3.)
In the section that sets forth the “Existing law” to be affected by
the bill, the report states that existing law “provides that
[Contra Costa Employees Retirement Association] retirement
system employees are county employees subject to the county
civil service or merit system rules adopted by the board of
supervisors for the compensation of county officers and
employees.” (Id. at p. 1, italics added.)
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OF LOS ANGELES
Opinion of the Court by Corrigan, J.
The Legislature’s understanding that salary decisions are
ordinarily under the aegis of boards of supervisors demonstrates
why statutes tailored to the specific needs of certain counties
were deemed necessary. Over the course of two decades, the
Legislature has acted to designate four retirement systems as
separate districts, with their own measure of authority over
classification and salary setting. That so many parties, over so
many years, undertook specific legislation to shift salary-setting
power from counties to retirement boards provides a strong
indication that retirement boards did not have this power all
along, as LACERA now contends. None of this substantial
legislative action would have been necessary if, as LACERA
urges, the shift in salary-setting authority had taken place years
before when section 31522.1 was enacted. If the electorate, or
their representatives, determine that a different approach to
salary and classification is preferable, these actions show that it
is possible to achieve that result. The solution, however, lies in
properly adopted legislative change, not in an approach that
ignores the existing legislative and constitutional structure.
5. Consistency with Constitutional Provisions
Finally, we are persuaded that the County’s
understanding of section 31522.1 is correct because a contrary
interpretation would raise serious constitutional questions. As
discussed, the constitutional home rule provisions (Cal. Const.,
art. XI, §§ 1, 4) were adopted to prevent state encroachment on
counties’ core powers, including specifically their power to
determine the compensation of county employees. (County of
Riverside, supra, 30 Cal.4th at pp. 285, 289–290; County of
Sonoma, supra, 173 Cal.App.4th at p. 338.) The animating
purpose of the home rule provisions was to “ ‘prevent
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Opinion of the Court by Corrigan, J.
interference by the state government’ ” in the management of
local affairs. (Younger v. Board of Supervisors (1979) 93
Cal.App.3d 864, 869.) Of particular relevance here, the purpose
of these constitutional provisions “was ‘ “to give greater local
autonomy to the setting of salaries for county officers and
employees, removing that function from the centralized control
of the Legislature.” ’ ” (Retired Employees, supra, 52 Cal.4th at
p. 1184.) “Although the [provisions’] language does not
expressly limit the power of the Legislature, it does so by
‘necessary implication.’ ” (County of Riverside, supra, 30 Cal.4th
at p. 285.) Accordingly, there is serious reason to question
whether the Legislature could have unilaterally revoked
counties’ salary-setting authority in enacting section 31522.1,
as the dissent and LACERA contend, without violating the
Constitution.25
The dissenting opinion argues the home rule provisions do
not apply because retirement system staff are not truly “county
25
At times, the dissenting opinion appears to misapprehend
our point about the significance of the home rule provisions on
this issue. We do not contend “CERL provides counties ‘home
rule’ authority over retirement system staff.” (Dis. opn. of
Groban, J., post, at p. 20, italics added; see also id. at p. 28
[expressing doubt “that the Legislature intended to give
counties home rule authority”].) To the extent counties enjoy
home rule authority over their employees, that authority is
derived from article XI of the Constitution, not from CERL. Nor
do we agree with the dissent that home rule authority extends
only to personnel the Legislature saw fit to expressly define as
county employees in enacting CERL. (See dis. opn. of Groban,
J., post, at pp. 27–30 & fn. 9.) Making counties’ constitutional
authority subject to legislative definition would turn our home
rule jurisprudence on its head and eviscerate these provisions.
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employees,” despite their express designation as such in
section 31522.1. These personnel do not work for the county, the
dissent suggests, but for entities that are distinct and
independent from the counties they serve. (Dis. opn. of Groban,
J., post, at pp. 27–29.) Like LACERA’s argument to this effect
in regard to Proposition 162, however, the dissent’s position is
based on language drawn from preclusion decisions that did not
purport to decide which entity employs retirement system
personnel. In each of the cited cases, individuals sought to bind
retirement boards to a disability determination in their favor in
workers’ compensation proceedings. (See Traub, supra, 34
Cal.3d at pp. 797–798; Preciado v. County of Ventura (1982) 143
Cal.App.3d 783, 786; Summerford v. Board of Retirement (1977)
72 Cal.App.3d 128, 130; Flaherty v. Board of Retirement (1961)
198 Cal.App.2d 397, 401.) After a careful examination of the
relevant facts, each case concluded the retirement board lacked
an identity of interests sufficient to put it in privity with the
county for preclusion purposes. (Traub, at pp. 798–799;
Preciado, at pp. 787–789; Summerford, at pp. 131–132;
Flaherty, at pp. 403–404.) The dissent’s selective quoting from
these cases fails to appreciate that a privity inquiry is highly
contextual. “ ‘Whether someone is in privity with the actual
parties requires close examination of the circumstances of each
case.’ ” (Victa v. Merle Norman Cosmetics, Inc. (1993) 19
Cal.App.4th 454, 464.) Privity ultimately amounts to a “ ‘policy
decision’ ” that the parties are sufficiently close that binding one
to a judgment against the other does not offend due process.
(Gikas v. Zolin (1993) 6 Cal.4th 841, 849.) The dissent’s reliance
on privity decisions elides this important context.
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Opinion of the Court by Corrigan, J.
In a related point, the dissent appears to suggest that the
staff of CERL retirement systems may have never been county
employees, even before the enactment of section 31522.1. (See
dis. opn. of Groban, J., post, at pp. 26–27, 29.) The argument is
difficult to square with CERL’s history. There is no dispute that
county governments were responsible for appointing and
compensating all “administrative staff” of CERL retirement
systems before the passage of Assembly Bill No. 470.
(Retirement Com., Analysis of Assem. Bill No. 470, supra, as
introduced Feb. 26, 1973.) As LACERA’s own briefing
acknowledges, the bill “transfer[ed]” this authority to CERL
retirement boards, to the dismay of many counties. No reason
is apparent why such a transfer of control would have been
necessary if the staff in question were already considered
employees of their retirement systems, rather than the county.
Finally, we do not agree that the home rule provisions’
significance can be dismissed because a county’s participation in
CERL is “entirely voluntary.” (Dis. opn. of Groban, J., post, at
p. 31.) While voluntary participation might foreclose some
challenges,26 it has no bearing on the specific issues here for the
26
For example, the dissent argues statutes exempting some
executive positions from civil service would be constitutionally
suspect under our analysis. (See dis. opn. of Groban, J., post, at
pp. 31–32.) Yet this legislation was supported, or at least not
challenged, by the counties affected. (See Assem. Com. on Pub.
Employees, Retirement & Social Security, Analysis of Assem.
Bill No. 2655 (Reg. Sess. 1995–1996) as amended Apr. 18, 1996,
p. 2 [listing San Diego County Board of Supervisors as
supporting bill that enacted section 31522.3]; Assem. Com. on
Pub. Employees, Retirement & Social Security, Analysis of Sen.
Bill No. 1132 (Reg. Sess. 2001–2002) as amended Apr. 18, 2001,
p. 2 [listing no opposition from County for bill that enacted
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Opinion of the Court by Corrigan, J.
simple reason of timing. “Since 1937, Los Angeles County has
participated in CERL,” having opted into the scheme soon after
its creation. (Holmgren, supra, 159 Cal.App.4th at p. 603.) But
the Legislature did not enact section 31522.1 until 1973. By
then, the County had been committed for more than 35 years to
a statutory scheme that honored its home rule authority to set
the compensation and civil service classification of county
employees. Whether the Legislature could unilaterally strip the
County of that authority raises a significant constitutional
question.
“[W]herever possible, we will interpret a statute as
consistent with applicable constitutional provisions, seeking to
harmonize Constitution and statute.” (California Housing
Finance Agency v. Elliott (1976) 17 Cal.3d 575, 594.) The
County’s interpretation best harmonizes section 31522.1 with
the home rule provisions. The Legislature granted retirement
boards the authority to hire all necessary staff, but it did not
alter counties’ constitutionally based power to decide their civil
service classification and salary.
C. Policy Arguments
Considerations of public policy also support our
interpretation of the governing law.
LACERA’s policy arguments focus on the assertion that,
in order to run a successful fund, it must have the sole power to
pay its employees whatever it determines is proper without
“political meddling” from the County. However, this contention
section 31522.4, exempting LACERA senior management].)
The same cannot be said of Assembly Bill No. 470, which the
County strenuously opposed.
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Opinion of the Court by Corrigan, J.
ignores the nature of the institutions at play and their complex
interrelationship. It bears emphasis that LACERA is not a
private investment fund. It is a governmental entity, staffed by
government employees. (§ 31522.1.) The distinction is
consequential because a key feature of government employment
in California is the civil service system. Except for a few
positions designated unclassified, all state employees (see Cal.
Const., art. VII, § 1) and all County employees (L.A. County
Charter, § 33; see §§ 31100, et seq.) are explicitly made part of
the civil service.27 Accordingly, unlike private funds, LACERA’s
personnel decisions are constrained by civil service laws and
principles.
The overall aim of the civil service laws is “to limit
corruption and to promote efficiency and economy in state
government.” (Westly, supra, 105 Cal.App.4th at p. 1118.) The
laws serve “a twofold purpose — ‘to abolish the so-called spoils
system’ in the matter of appointment in the service and ‘to
increase the efficiency’ of employees therein ‘by assuring [them]
of continuance in office regardless of what party may then be in
power’ together with the opportunity ‘for promotion to higher
positions when vacancies occur [as] the reward of faithful and
honest’ work.” (Almassy, supra, 34 Cal.2d at p. 404.) This
principle, requiring that appointments and promotions be based
upon skills and performance, has been enshrined by voters in
the Constitution. (Pacific Legal Foundation, supra, 29 Cal.3d at
27
The Government Code does not impose its own civil
service system but authorizes counties to create systems
adaptable to their individual needs. (§ 31102.) The County did
so, amending its charter to prescribe detailed civil service rules.
(See L.A. County Charter, §§ 30–44.7.)
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Opinion of the Court by Corrigan, J.
p. 174; see Cal. Const., art. VII, § 1, subd. (b).) In addition, the
civil service statutes have enacted a related policy of “like pay
for like work” (California Attorneys, supra, 174 Cal.App.4th at
p. 436), under which “[p]ositions involving comparable duties
and responsibilities are similarly classified and compensated”
(§ 18500, subd. (c)(1)).
These are sound goals served by policies with a long
history in California law. (See Pacific Legal Foundation, supra,
29 Cal.3d at pp. 181–182 [tracing civil service statutes back to
1913].) They promote a system that is fair to all employees and
makes government employment achievable for a broad and
inclusive part of the population. To further those goals, the
County’s Board of Supervisors sets civil service classifications
for all classified positions, determines the salary levels for these
positions based on the principle of equal pay for equal work, and
formalizes these decisions in a salary ordinance. (L.A. County
Charter, § 11.) In recognition of LACERA’s specialized needs,
the County is called upon to analyze comparable positions not
only in County government but also in other retirement
systems, including complex statewide systems such as
CalPERS. LACERA now labels this approach “political.” But
maintaining salary alignment for comparable positions is a
fundamental responsibility imposed on counties by the civil
service laws. Indeed, as discussed, these laws were enacted for
the very purpose of countering political corruption, arbitrary
decision-making, and self-dealing in government employment.
(See Pacific Legal Foundation, at pp. 182–185; Almassy, supra,
34 Cal.2d at p. 404.)
A contextual understanding of section 17 is necessary to
preserve the important policies underlying the civil service laws.
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Opinion of the Court by Corrigan, J.
LACERA’s broad reading of section 17 would potentially
override the civil service provisions applicable to state and
county employment. Under LACERA’s interpretation,
retirement systems have “complete and absolute” authority over
personnel decisions “subject only to the terms of Proposition 162
and judicial review.” (Los Angeles County Retirement, supra,
102 Cal.App.5th at p. 1202, italics added.) If this is correct, it is
not clear whether, or upon what basis, retirement systems could
be required to adhere to applicable civil service laws. When this
issue arose in Westly, the court resolved it by reaching an
interpretation of section 17 that harmonized its grant of
authority with article VII’s civil service provisions. (See Westly,
supra, 105 Cal.App.4th at p. 1113.) Adopting LACERA’s
contrary interpretation would nullify that holding and grant
retirement systems carte blanche to evade civil service
requirements any time it suits them. And there is no logical
reason why the effects would be limited to statewide retirement
systems. LACERA broadly stresses that it has plenary
authority over staffing decisions “[n]otwithstanding any other
provisions of law” (Cal. Const., art. XVI, § 17), which
presumably includes CERL’s directive that personnel appointed
by a county retirement board “shall be county employees and
shall be subject to the county civil service or merit system rules”
(§ 31522.1, italics added). When pressed at oral argument on
whether its interpretation of section 17 would override the civil
service laws, LACERA’s counsel responded that LACERA did
not object to complying with these laws because it found them
“compatible” with its operations. The response only begs the
question of what would happen if at some point LACERA, or
some other retirement system, no longer considers civil service
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Opinion of the Court by Corrigan, J.
“compatible” with its business goals. The constitutional
interpretation LACERA urges would allow it to evade civil
service laws despite the Legislature’s clear intention to the
contrary.
A contextual understanding of county retirement boards’
hiring authority also preserves the collaborative relationship
outlined in CERL. The CERL statutes define an intricate
system of checks and balances between these two government
entities. As noted, roughly half of a retirement board’s members
are appointed by the county, and CERL requires that the county
treasurer sit on the board as well. (§§ 31520, 31520.1.) In
addition, the county’s district attorney or county counsel serves
as the retirement board’s attorney absent a conflict of interest
(§§ 31529, 31529.5), and the county’s health officer must advise
the retirement board on medical matters and attend board
meetings upon request (§ 31530). Although a retirement board
may make regulations for operating the system, these
regulations are not effective until they are approved by the
county’s board of supervisors. (§ 31525; see Rigley v. Board of
Retirement (1968) 260 Cal.App.2d 445, 450.) Finally, CERL
gives counties an important degree of oversight of their
retirement system’s financial health. CERL retirement boards
must conduct an audit of the system every year and file the
report with the board of supervisors (§ 31593) along with a
sworn statement regarding the system’s financial condition
(§ 31597). The county auditor also has a right to audit the
retirement system’s accounts if the board of supervisors so
requests. (§ 31593.)
We emphasize that the statutes as a whole create a
process based on interaction and cooperation. A CERL
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Opinion of the Court by Corrigan, J.
retirement board discharges essential services by managing a
county’s pension fund and the operations of the retirement
system to ensure members are properly served in a manner that
is both fiscally sound and efficient. The retirement board brings
its specialized understanding and expertise to the complex tasks
entrusted to it. Membership on the board by county officers and
appointees ensures that those participants are involved
throughout the board’s process of evaluating its needs. An
amicus curiae brief filed by the California State Association of
Counties (CSAC) observes that CERL creates a type of “meet-
and-confer process” in which “the needs of both the retirement
system and the county are taken into account.”28 This process
“works well,” according to CSAC, an observation supported by
the long history of successful collaboration between LACERA
and the County before the present dispute.
28
The process begins when LACERA submits requests for
classification and compensation levels for specific positions. The
County’s Chief Executive Officer reviews them in the same
manner as requests concerning other County employment,
evaluating their alignment with existing classifications and
salary levels, including those within LACERA. The County also
analyzes how the requests align with comparable positions in
other CERL retirement systems, statewide systems such as
CalPERS, and private sector employers. After further
negotiations, as needed, the Board of Supervisors ultimately
implements its final decisions in the County’s salary ordinance.
(§ 31522.1.) The dissent’s concern that our decision would allow
retirement boards to hire personnel only for existing positions is
ill founded. (See dis. opn. of Groban, J., post, at p. 14, fn. 6.) We
express no such limitation on retirement boards’ appointment
authority, nor does it appear that counties have attempted to
impose such a limitation.
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In contrast to the cooperative process urged by the County,
and supported by the network of interrelationships outlined in
CERL, LACERA asserts that retirement boards must have total
and final control over these significant aspects of hiring, with
counties obligated to rubber stamp their decisions. Such an
interpretation would transform the system from one in which a
retirement board recommends changes to one in which it is
given unbridled authority to command them. LACERA
contends such complete control is necessary in order to satisfy
its fiduciary duties. But this argument “confuse[s] the measure
of [a retirement board’s] power with the reasonableness of its
exercise of the power.” (Westly, supra, 105 Cal.App.4th at
p. 1114.) The fiduciary duties outlined in section 17,
subdivisions (a) through (h) define how a retirement board’s
power must be exercised. They outline the scope of retirement
board authority, constraining them from taking actions against
the interest of plan participants. They are not a grant of power
in themselves but a delineation of how that power is to be used.
LACERA’s policy arguments do not persuade us to
interpret Proposition 162 more broadly than the voters
intended, or to upset the carefully calibrated legislative scheme
that makes cooperation between retirement boards and county
governments the default rule. We emphasize that voters or
their representatives remain free to shift authority over
compensation and classification decisions. Here, we simply hold
that they have not done so to date, except as part of legislation
enacted for specific counties. The arguments for such a change
are more appropriately directed to the Legislature, which may
systematically evaluate whether to change or make an exception
to the default allocation of authority outlined in CERL. Indeed,
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Opinion of the Court by Corrigan, J.
that is exactly the approach taken by the four county retirement
systems that have been specially designated as districts. The
retirement boards in these counties urged their need for greater
flexibility in attracting and retaining specialized talent, and
they obtained legislative solutions tailored to their particular
needs. In three of the counties, for example, only personnel
appointed to specific executive-level positions are designated
employees of the retirement system (§§ 31522.5, 31522.7,
31522.10–31522.11), whereas in Contra Costa County all
personnel are legislatively declared to be retirement system
employees and not county employees (§ 31522.9). On a
statewide level, CalPERS and CalSTRS obtained similar
legislation allowing them to fix the salaries of certain managers.
(See § 20098; see also ante, at p. 28, fn. 10.) The enactment of
these special exceptions demonstrates that legislative action is
available to make modifications based upon particularized
needs.29 But the baseline system the Legislature enacted in
29
The preference for tailored solutions led to the demise of a
proposed bill that would have extended essential provisions of
the county-specific statutes to all CERL retirement systems,
allowing them to elect to become districts with staff employed
by the retirement system instead of the county. (Legis.
Counsel’s Dig., Assem. Bill No. 1853 (Reg. Sess. 2015–2016 Reg.
Sess.) pp. 2–4, 8–10.) In vetoing the bill, Governor Edmund G.
Brown, Jr., explained that allowing any CERL retirement board
“to unilaterally separate from the county” was “too far-
reaching.” (Governor’s veto message to Assem. on Assem. Bill
No. 1853 (Sept. 23, 2016) Recess J. No. 15 (2015–2016 Reg.
Sess.) p. 6632.) “Previous bills that [had] authorized a county
retirement system to become independent were the result of
agreement between the county and the retirement system.”
(Ibid.) “This more collaborative approach,” the governor
believed, “better serves the public interest.” (Ibid.)
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Opinion of the Court by Corrigan, J.
CERL, which Proposition 162 left undisturbed, is one of
collaboration between county governments and their retirement
boards.
D. Remedies
Finally, it is important to note that this case deals only
with the question of which body has ultimate authority over
employee classification and salaries. This case comes to us
because of a conflict between the two bodies in question, but
neither party has focused on the appropriate framework for
resolving such conflicts. The details of that framework are thus
beyond the scope of the issues presently before us. We do,
however, offer a few general observations.
The statutory framework makes clear that county power
over retirement board staffing decisions is not unfettered. The
obligation to work reasonably and collaboratively falls on both
retirement boards and boards of supervisors. Such an approach
allows decisionmaking informed by the retirement board’s
specialized expertise and the supervisors’ obligation to operate
the overall civil service system as the Constitution and
applicable legislation requires. Section 31522.1 grants
retirement boards the express authority to “appoint such
administrative, technical, and clerical staff personnel as are
required to accomplish the necessary work of the boards.” What
work is “necessary,” and the staff needed to do it, are properly
considered to fall within the retirement board’s authority over
system administration and service delivery. A county board of
supervisors is not free to arbitrarily ignore or override a
retirement board’s reasonable decisions about the staff it needs
to operate the retirement system and manage its investments
effectively. If a county unreasonably rejects the retirement
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OF LOS ANGELES
Opinion of the Court by Corrigan, J.
board’s recommendations, preventing appointments that “are
required to accomplish the necessary work of the boards” (ibid.),
judicial relief is available by writ of mandate (Code Civ. Proc.,
§ 1085).
Mandamus lies not only to compel the performance of a
ministerial duty, but also to correct a public official’s abuse of
discretion. (See Common Cause v. Board of Supervisors (1989)
49 Cal.3d 432, 442; California Public Records Research, Inc. v.
County of Stanislaus (2016) 246 Cal.App.4th 1432, 1443.) Thus,
although salary and classification decisions ultimately lie
within a county’s constitutional authority, they remain subject
to judicial review for abuse of discretion. (See Walker v. County
of Los Angeles (1961) 55 Cal.2d 626, 639 [holding courts have
the power to strike down a salary ordinance that violates a city’s
charter]; People ex rel. Harris v. Rizzo (2013) 214 Cal.App.4th
921, 940–941 [same].) While a public entity enjoys considerable
discretion in its legislative and quasi-legislative acts (such as
salary setting), the court must still ensure that the entity “has
adequately considered all relevant factors, and has
demonstrated a rational connection between those factors, the
choice made, and the purposes of the enabling statute.”
(California Hotel & Motel Assn. v. Industrial Welfare Com.
(1979) 25 Cal.3d 200, 212 (California Hotel); see Western States
Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 577.)
Accordingly, a retirement board may seek mandamus
review to challenge not only the merits of a county’s
classification or compensation decision but also the process by
which that decision was reached. (California Hotel, supra, 25
Cal.3d at p. 212; see Alameda Health System v. Alameda County
Employees’ Retirement Assn. (2024) 100 Cal.App.5th 1159, 1177
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LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Opinion of the Court by Corrigan, J.
[judicial inquiry encompasses “ ‘ “whether the public entity’s
action . . . failed to conform to procedures required by law” ’ ”].)
The collaborative scheme provided in CERL anticipates that the
parties will engage in meaningful discussions in good faith. This
deliberative process is essential for a county to make an
informed exercise of its discretion. It contemplates that the
board of supervisors will give due weight to a retirement board’s
explanation of why a different salary or classification is
appropriate in light of the complexity of the tasks involved and
the compensation required to hire and retain particularly
qualified employees with specialized skills. A reviewing court
may overturn a decision that is not the product of such good faith
collaboration. In the alternative, if requested at the appropriate
time, the court may order an uncooperative party to engage in
the collaborative process that the Legislature has required.30
The County’s 2021 refusal to implement certain
classification and salary decisions for LACERA employees gave
30
Consistent with its view that CERL gives retirement
boards final authority over classification and salary setting, the
dissenting opinion would put the onus on counties to seek writ
relief if they object to these retirement board decisions. (Dis.
opn. of Groban, J., post, at p. 42 & fn. 12.) Yet the dissent offers
no satisfying explanation for why a county would have standing
to obtain such relief when, according to the dissent’s view of the
law, counties have no say in retirement system staffing and
merely a ministerial duty to rubber stamp the decisions of
retirement boards. Under that view, establishing that counties
have a beneficial interest sufficient to support standing seems a
difficult task. Indeed, when asked about this possibility at oral
argument, LACERA’s own counsel responded that counties
might not have standing to seek writ relief based on breach of
fiduciary duty because LACERA owes a fiduciary duty to
members, not the county.
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Opinion of the Court by Corrigan, J.
rise to this lawsuit. But, as LACERA has framed its action, the
legal argument concerns whether the County had the authority
to make salary and classification decisions at all. Thus far,
LACERA has not claimed the County abused its discretion when
it acted in regard to some of the retirement board’s particular
recommendations. Instead, it has broadly argued throughout
these proceedings that the County had no authority to refuse the
retirement board’s recommendations and was compelled to
implement LACERA’s decisions in their entirety. It is this legal
assertion we have rejected. The nature of this litigation as it
stands does not present the question of whether the Board of
Supervisors acted unreasonably or improperly, or whether it
properly exercised the power entrusted to it. Neither we, nor
the courts below, have been called upon to examine whether the
County’s refusal to implement any specific personnel
recommendation constituted an abuse of discretion. LACERA
has made allegations suggesting the County may have done so.
Now that the allocation of authority has been resolved, the trial
court on remand may permit LACERA to amend its complaint
and challenge any specific personnel decisions it urges were
improper.
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Opinion of the Court by Corrigan, J.
III. DISPOSITION
The Court of Appeal’s decision is reversed. On remand,
the matter shall be returned to the trial court for it to reinstate
its judgment. Alternatively, the court may permit an
amendment to the complaint or other proper continuation of this
litigation in light of the clarification provided here.
CORRIGAN, J.
We Concur:
GUERRERO, C. J.
KRUGER, J.
SIMONS, J.*
__________________________
* Associate Justice of the Court of Appeal, First Appellate
District, Division Five, assigned by the Chief Justice pursuant
to article VI, section 6 of the California Constitution.
86
LOS ANGELES COUNTY EMPLOYEES RETIREMENT
ASSN. v. COUNTY OF LOS ANGELES
S286264
Dissenting Opinion by Justice Groban
In 1973, the Legislature passed Assembly Bill No. 470 (see
Stats. 1973, ch. 269, §§ 1–2, p. 665 (Assembly Bill 470)), which
fundamentally altered the administration of pension plans that
operate under the 1937 County Employees Retirement Law.
(CERL; Gov. Code, § 31450 et seq.)1 Prior to that time, counties
typically chose the personnel necessary to administer CERL-
governed retirement plans and allocated funds to pay those
employees. Assembly Bill 470 proposed adding two new sections
to the Government Code that would change those practices.
First, section 31522.1 would authorize retirement boards to
“appoint such . . . personnel as are required to accomplish the
necessary work of the boards.” Second, section 31580.2 would
authorize retirement boards to adopt an annual budget for the
costs of administering the retirement system. The statute
would further direct that those administrative costs were to be
paid from retirement fund assets, subject to a spending cap of
1/10 of 1 percent of the fund. Numerous counties opposed the
legislation, arguing that these new provisions would leave
counties with “no control” over retirement boards’ personnel and
spending decisions. (See, e.g., James A. Hayes, Supervisor of
the 4th District of the County of Los Angeles, letter to Governor
1
Unless otherwise noted, all further statutory citations are
to the Government Code.
1
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
Ronald Reagan, July 10, 1973; see also dis. opn., post, at pp. 16–
17.) The Legislature ultimately rejected those critiques and
Assembly Bill 470 became law.
Following the adoption of Assembly Bill 470, Los Angeles
County (the County) and the Los Angeles County Employees
Retirement Association (LACERA) agreed that sections 31522.1
and 31580.2 provided retirement boards authority to establish
new classifications within the retirement system and to set the
compensation of retirement system personnel. After almost 40
years of operating under that shared understanding, the County
abruptly changed course and asserted that it had authority to
veto the retirement boards’ personnel decisions.
Today, the majority endorses the County’s newly adopted
interpretation of the law. More specifically, it concludes that
despite vesting appointment and budgeting authority in the
retirement boards, Assembly Bill 470’s statutory provisions are
nonetheless “most reasonably understood to mean that” the
counties have final authority to decide what positions are
necessary to administer the retirement system and how much
those positions should be paid. (Maj. opn., ante, at p. 58.) I
disagree with that interpretation, which effectively nullifies the
very appointment and budgeting authority that Assembly Bill
470 intended to convey to the retirement boards.
I simply do not believe that a retirement board can have
the statutory authority to “appoint such . . . personnel as are
required” (§ 31522.1) to administer the retirement system but
simultaneously lack the power to decide what positions are
necessary to carry out those administrative duties. And I do not
understand how a retirement board can have independent
budgeting authority over “the entire expense of administration
2
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
of the retirement system” (§ 31580.2) but lack control over
employee salaries, which is the system’s single biggest expense.
Moreover, adopting LACERA’s interpretation does not
withdraw the County’s ability to influence these employment
decisions. Far from it. The County’s own appointees control a
majority of the seats on LACERA’s Board of Retirement, which
reviews and approves personnel changes before they are ever
submitted to the County’s Board of Supervisors. Because I am
unpersuaded by the majority’s effort to address those concerns,
I dissent.2
I. BACKGROUND
A. Relevant Provisions of CERL
Under CERL, “the management of the retirement system
is vested in the board of retirement.” (§ 31520.) This board is
comprised of the county treasurer and either four or eight
additional members. (See §§ 31520, 31520.1.) Half of those
additional members are appointed by the county board of
supervisors and the other half are elected by members of the
retirement plan. (See §§ 31520; 31520.1.)3 The structure of the
2
Because I believe that the 1973 amendments to CERL are
most reasonably construed as providing CERL-governed
retirement boards authority over classification and salary
decisions, I would decline to address whether the plenary
authority set forth in The California Pension Protection Act of
1992 (Proposition 162) (see Ballot Pamp., Gen. Elec. (Nov. 3,
1992) text of Prop. 162, p. 70 et seq.) provides those boards (and
presumably non-CERL governed retirement boards)
constitutional authority over such decisions.
3
For counties in which the assets of the retirement system
exceed $800 million — which includes the County of Los
Angeles — the board of supervisors may also establish a board
of investments that is “responsible for all investments of the
3
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
board reflects a shared governance in which both the county and
the retirement system members have a say in the management
of the plan.
After CERL was enacted, counties typically decided what
personnel they felt were necessary to administer the retirement
systems. This was done by county treasurers and boards of
supervisors. The counties were also responsible for allocating
funds from the general fund to pay the administrative costs of
the system. (See maj. opn., ante, at pp. 51–52.)
However, in 1973 Assembly Bill 470 added two new
provisions that changed these practices. Newly added section
31522.1 assigned the retirement boards authority to “appoint
such administrative, technical, and clerical staff personnel as
are required to accomplish the necessary work of the boards.”
(Stats. 1973, ch. 269, § 1, p. 665.) The appointments were to “be
made from eligible lists created in accordance with the civil
service or merit system rules of the county in which the
retirement system governed by the boards is situated. The
personnel shall be subject to the county civil service or merit
system rules and shall be included in the salary ordinance or
resolution adopted by the board of supervisors for the
compensation of county officers and employees.” (Ibid.; see also
maj. opn., ante, at pp. 52–53.) The last sentence of the statute
was later amended to add language stating, “The personnel
shall be county employees and subject to the county civil service
retirement system.” (§ 31520.2, subd. (b).) Like the retirement
board, the board of investments consists of the county treasurer,
with the remaining positions being evenly divided between
appointees of the county and appointees of the retirement plan.
I collectively refer to the board of retirement and the board of
investments as “the retirement boards.”
4
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
or merit system rules.” (Stats. 1979, ch. 55, § 1, p. 136, italics
added; see maj. opn., ante, at p. 53.)
Assembly Bill 470 also added section 31580.2, which
provides that when a retirement board chooses to exercise its
appointment authority under section 31522.1, it must charge
“the entire expense of administration of the retirement system
. . . against the earnings of the retirement fund,” subject to a
spending cap of “one-tenth of 1 percent of the total assets.”4
(Former § 31580.2; Stats. 1973, ch. 269, § 2, p. 665.) The
current version of section 31580.2 clarifies that retirement
boards that choose to exercise their appointment power shall
“annually adopt a budget covering the entire expense of
administration of the retirement system,” which is to be charged
against the fund.
B. LACERA’s Historical Authority Over Personnel
Decisions
1. The County’s original understanding of CERL
In 1978, LACERA elected to exercise its appointment and
budgeting authority under sections 31522.1 and 35280.1. (See
maj. opn., ante, at p. 11.) From the time LACERA chose to
exercise that authority until the current dispute arose some 40
years later, there does not appear to be any documented
instance in which the County rejected a LACERA personnel
request. Indeed, the record shows that throughout that time,
the County agreed that: (1) LACERA’s retirement boards had
sole authority to create new classifications and set the salaries
over those positions over personnel decisions; and (2) the County
4
The spending cap has since been raised to “Twenty-one
hundredths of 1 percent of the accrued actuarial liability of the
retirement system.” (§ 31580.2, subd. (a)(1).)
5
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
had a ministerial duty to implement any such requests in the
county salary ordinance.
That understanding is memorialized in a formal opinion
letter that County Counsel provided to the County’s Chief
Administrator Officer in 1996. In that letter, County Counsel
agreed with an earlier analysis from LACERA’s outside counsel
(Morrison Foerster) concluding that sections 31522.1 and
31580.2 were most reasonably interpreted as assigning
LACERA authority over classification and salary setting,
subject only to judicial review. (County Counsel De Witt W.
Clinton, letter to Los Angeles County Chief Administrative
Officer Sally R. Reed, May 16, 1996 (1996 Opinion Letter).)
County Counsel explained that while section 31522.1 “is silent
with regard to the classification of LACERA employees, it does
provide that the LACERA boards ‘may appoint such . . .
personnel as are required to accomplish the necessary work of the
board.’ Since the LACERA boards·are presumably in the best
position to judge the types of employees necessary to accomplish
their work, we believe that the Legislature intended to leave the
question of classification up to them. They are also in the best
position to determine the compensation levels necessary to
recruit and retain qualified employees.” (1996 Opinion Letter,
italics added & underscoring omitted.)
County Counsel also noted that this reading was
consistent with both section 31580.2, which delegated budgeting
authority to the retirement boards, and the legislative history of
Assembly Bill 470, which showed that the County had opposed
the 1973 “legislation giving personnel and budget authority to
LACERA and lost.” (1996 Opinion Letter, supra.)
6
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
2. LACERA’s submission of personnel requests
Under the parties’ shared understanding of CERL,
LACERA generally followed a two-step process when seeking a
classification or salary change. First, retirement plan staff
prepared an internal memorandum for the board of retirement
(and where relevant the board of investment) describing the
proposed personnel changes and the associated costs. Those
memorandums explained the basis for the personnel changes
and were often accompanied by “classification surveys, class
studies and salary studies performed by outside consultants
retained by LACERA.” (Gregg Rademacher, LACERA Chief
Executive Officer, letter to the Los Angeles County Board of
Supervisors, April 15, 2010, at p. 1.) When new positions within
the retirement system were being proposed, the memorandums
contained a draft of the new classification that included a
description of the job duties, the experience requirements and
the relevant salary range.
If the retirement boards approved the personnel changes,
LACERA prepared a memorandum for the County board of
supervisors that explained the basis for the personnel changes
and included a draft of an ordinance establishing the new
classifications and salary ranges. The boards of supervisors
would then adopt the ordinance, which the County viewed as a
ministerial duty that it was statutorily compelled to perform.
Upon ratification by the board of supervisors, the personnel
changes were reflected in the County Salary Code, which
includes a separate section that lists LACERA’s personnel.
C. The County’s Change of Position
In 2018, that long-standing approach to retirement system
personnel decisions abruptly changed when County Counsel
7
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
informed LACERA that the County no longer believed CERL
provided retirement boards the authority to adopt new
classifications and salaries. Repudiating its 1996 opinion letter
(see dis. opn., ante, at p. 6), the County argued for the first time
that it had constitutional authority over those personnel
decisions because section 31522.1 states that retirement system
appointees are “county employees.” The County also argued
that the views set forth in its 1996 opinion letter had been
undermined by Westly v. Board of Administration (2003)
105 Cal.App.4th 1095, which held that Proposition 162 did not
give CalPERS authority to exempt its employees from civil
service or to take various other personnel actions that were in
conflict with state law. (See maj. opn., ante, at pp. 27–28.) The
County did not explain why Westly, a case that had been decided
some 15 years earlier and that did not implicate CERL, had
suddenly caused it to reinterpret sections 31522.1 and 31580.2.5
Shortly after notifying LACERA that its views had
changed, the County rejected several LACERA personnel
5
The majority questions whether the County truly deferred
to LACERA’s personnel decisions during the four decades that
preceded the current dispute, contending that “the record does
not support this assertion.” (Maj. opn., ante, at p. 11, fn. 6.)
However, throughout these proceedings LACERA has
consistently (and explicitly) argued that “[f]or decades the
County recognized LACERA’s authority under CERL . . . to
appoint and set salaries for its personnel, but this changed in or
around 2017.” Notably, the County has never disputed those
claims nor has the County identified a single instance in which
it denied or even disagreed with a LACERA personnel request
prior to the current dispute. If the County believed that
LACERA had misrepresented the parties’ past practices, I
would expect it would have said as much at some point in this
long-running litigation.
8
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
requests, which included various new management positions, a
new information technology department and several salary
amendments. LACERA believed that the new classifications
were needed to “develop[], implement[], and manage[]”
LACERA’s increasingly “complex[] . . . operations.” (Robert Hill,
LACERA Interim Chief Executive Officer, letter to the County
of Los Angeles Board of Supervisors, May 29, 2018, at p. 2.) A
new deputy chief investment officer (DCIO), for example, would
facilitate “long term strategic planning” for LACERA’s
expanding investment portfolio and a new principal chief
counsel would enable the Chief Counsel “to devote more time to
governance, strategic, and compliance issues.” (Gregg
Rademacher, LACERA Chief Executive Officer, letter to
LACERA Operations Oversight Committee, January 20, 2017,
at p. 3.)
In response to these requests, County Chief Executive
Officer Sachi Hamai prepared his own analysis of the personnel
changes and recommended that the board of supervisors reject
many of them. While acknowledging that LACERA’s proposed
personnel changes were the product of an extensive
management study that had been conducted by outside
consultants, Hamai did not see the “benefits of adding” several
of the new positions, including a DCIO or a principal chief
counsel. (Sachi A. Hamai, Los Angeles County Chief Executive
Officer, letter to the Los Angeles County Board of Supervisors,
May 29, 2018, attachment, at p. 2; see id. at p. 3.) In support,
Hamai argued that other county retirement systems did not
have analogous positions. Hamai’s analysis did not provide any
information as to whether those other systems were comparable
in size or complexity to LACERA, which is the largest county
retirement system in the United States. Hamai was likewise of
9
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
the view that the “the size of [LACERA’s] Legal Services
Division” did not support a principal chief counsel position.
(Hamai Letter, at p. 3.)
When LACERA renewed its request for a DCIO, the
County again denied approval, explaining that the level of
compensation LACERA had proposed for the position exceeded
the salaries of personnel who held analogous roles within other
county agencies. The County further explained that while
LACERA “typically compares itself with other retirement
systems such as CalPERS,” the County believed that “when
allocating positions and appropriate salary levels, internal
alignment with other County departments is important. We
must strike a balance between external market factors and
internal equity considerations.” (Ann Havens, Acting Senior
Manager and CEO of the Los Angeles County Classification and
Compensation Division, letter to Carly Ntoya, LACERA
Director of Human Resources, January 19, 2021, at p 2.)
Over the next several years, LACERA and the County
continued to disagree about the necessity of various
classification and salary requests, culminating in the current
suit.
II. DISCUSSION
The question in this case is whether CERL — and in
particular sections 31552.1 and 31580.2 — authorize retirement
boards to establish new classifications and salary ranges for
retirement system personnel or whether counties have that
authority.
The majority concludes that those provisions are
reasonably susceptible to multiple interpretations. The first
interpretation is that the retirement boards’ appointment and
10
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
budgeting authority “necessarily includes the power” to
establish new positions (i.e., classifications) and to set the
salaries of their personnel. (Maj. opn., ante, at p. 54.) The
second reading is that the statutes authorize retirement boards
to make recommendations regarding classifications and salary
ranges, but counties have discretionary authority to deny those
recommendations. As discussed in more detail below, this
second reading is premised primarily on the fact that section
31522.1 describes retirement personnel as “county employees.”
(See maj. opn., ante, at pp. 57–58; see also id. at pp. 70–74.)
The majority concludes the second interpretation provides
the most plausible reading of the statutory language. I disagree.
Like the Court of Appeal, I believe that the Legislature’s 1973
amendments were intended to assign classification and salary
setting authority to the retirement boards, which accords with
how the County read the statutory language for almost four
decades. In my view, having independent authority over the
appointment of personnel and budgeting would mean very little
without having the ability to establish new positions and set the
compensation level of retirement system personnel.
A. CERL Assigns Retirement Boards Authority
Over Personnel decisions
1. The text of CERL
I begin with the language of CERL. (See Olson v.
Automobile Club of Southern California (2008) 42 Cal.4th 1142,
1147 [“Statutory interpretation begins with an analysis of the
statutory language”].) Section 31520 expressly provides that
“the management of the retirement system is vested in the
board of retirement.” (§ 31520, italics added.) Section 31522.1
states that the retirement boards “may appoint such
11
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
administrative, technical, and clerical staff personnel as are
required to accomplish the necessary work of the boards.” And
section 31580.2, subdivision (a) assigns the retirement boards
the authority to “annually adopt a budget covering the entire
expense of administration,” which is to be charged against the
plan itself. Those annual expenditures are subject to a spending
cap that is specified as a percentage of the assets of the fund.
Thus, CERL expressly assigns the retirement boards, and not
the counties, the authority to manage the retirement system, to
appoint the personnel it deems necessary to carry out those
managerial duties, to set the budget for administering the fund,
and to pay those administrative costs from the fund itself.
Considered together, I believe those broad delegations of
power are most reasonably construed as assigning retirement
boards authority to establish new classifications, which amount
to new positions of employment within the retirement system.
To conclude otherwise would effectively nullify the appointment
authority described in section 31522.1. Again, that provision
assigns the retirement boards authority to “appoint such . . .
personnel as are required to accomplish the necessary work of
the boards.” (§ 31522.1.) Allowing counties to veto positions
that the retirement boards have concluded are necessary to
carry out their duties would turn that provision on its head.
The facts of this case are illustrative. After conducting a
detailed study with the aid of outside consultants, LACERA’s
boards determined that they needed to appoint several new
positions to properly manage their increasingly complex
investment portfolio. The County, however, did not believe
those new positions were adequately beneficial and refused to
adopt the classifications. I find that outcome very difficult to
square with statutory language that expressly vests the
12
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OF LOS ANGELES
Groban, J., dissenting
retirement boards with authority to “manage[]” the retirement
system (§ 31520) and to “appoint” such staff as they believe are
“required” to carry out those duties (§ 31522.1).
I likewise find it difficult to square section 31580.2’s broad
delegation of budgetary authority with the majority’s conclusion
that the counties have final authority over the salaries of
retirement system personnel. Section 31580.2, subdivision (a)
not only authorizes retirement boards to adopt a budget
covering the “entire expense” of administering the system but
also directs that such expenditures are to be paid by from the
plan’s assets (not the county general fund) and sets an annual
spending limit. I believe that these elements of section 31580.2
show that the Legislature intended to give the retirement
boards discretionary authority to decide how much to spend on
administering the plan, subject to the spending limit. Not
surprisingly, LACERA’s primary administrative expenditure is
employee salaries, which comprise nearly three-quarters of the
annual budget. As explained by the Court of Appeal, the
assertion that “the Legislature gave retirement boards
authority to set their own budgets and hire their own employees
so long as they paid those employees from system assets, yet
silently reserved for county administrators the right to veto the
vast majority of that spending, is inconsistent with retirement
boards having the ability to create, fund, and control their own
budgets.” (Los Angeles County Employees Retirement Assn. v.
County of Los Angeles (2024) 102 Cal.App.5th 1167, 1220–1221
(LACERA).)
The majority does not explain how the retirement boards
can be expected to appoint the personnel necessary to
administer the retirement system without having the power to
decide what positions are in fact necessary to carry out those
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duties. Nor does it explain how the retirement boards can have
independent budgeting authority over “the entire expense of
administration” but lack control over the system’s most
significant expense. Instead, the majority reads language into
the statute that is not in the text, construing sections 31522.1
and 31580.2 as merely “ ‘permit[ting retirement boards] to make
recommendations to the [b]oard of [s]upervisors’ ” regarding
classifications and employee compensation. (Maj. opn., ante, at
p. 14.) But section 31522.1 does not say that retirement boards
may make personnel recommendations to the county. Rather,
the statute says that retirement boards may “appoint” such
personnel as are required to carry out their work.6 (§ 31522.1,
italics added.) Similarly, section 31580.2 does not say that
retirement boards may make recommendations to the county
regarding expenditures. It states that the retirement boards
“shall annually adopt a budget covering the entire expense of
6
At times, the majority also appears to argue that section
31522.1’s appointments clause might be read to merely allow
retirement boards to “hire” personnel into existing
classifications (i.e., existing positions) but does not authorize
them to establish new positions. (Maj. opn., ante, at pp. 2, 47,
50.) The entirety of the appointments clause, however, states
that the retirement boards may “appoint such administrative,
technical, and clerical staff personnel as are required to
accomplish the necessary work of the boards.” (§ 31522.1, italics
added.) In my view, that language clearly suggests that the
boards have authority to decide not only who to hire but also to
determine what positions are “required to accomplish the
necessary work of the boards.” (Ibid.) Again, if the Legislature’s
intent were merely to allow the boards to choose candidates to
fill open positions, it could have said as much. By authorizing
the boards to appoint such personnel as are required to
accomplish the necessary work of the retirement system, the
Legislature signaled a broader intent.
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administration of the retirement system,” subject only to a
spending cap. (§ 31580.2, subd. (a), italics added.)
If the Legislature had merely intended to allow retirement
boards to make recommendations to the county regarding
appointments and expenditures, it could have easily said as
much. Alternatively, it could have included language indicating
that the retirement boards’ appointments and spending
decisions were subject to the approval of the county. But the
statutes include no such limitation. Instead, the only limitation
the Legislature placed on the retirement boards’ appointment
and budgeting authority was a spending cap that limited their
total expenditures to 1/10 of 1 percent of the fund’s assets. (See
stats. 1973, ch. 269, § 2, p. 665.)
2. Legislative history
LACERA’s reading of CERL finds substantial support in
the legislative history of Assembly Bill 470, which added
sections 31522.1 and 31580.2. The Assembly Retirement
Committee’s bill analysis explained that under then existing
law, “the administrative staff available to a [CERL] retirement
board is responsible to the [c]ounty,” and the boards of
supervisors are required to “appropriate annually . . . sufficient
money to offset the administrative cost of the county’s
retirement system.” (Assem. Retirement Com. Bill Analysis of
Assem. Bill No. 470 (1973–1974 Reg. Sess.), at p. 1 (Assem.
Retirement Com. Analysis.) According to the analysis, the
proposed bill would alter those procedures by allowing
retirement boards “to appoint [their] own administrative,
technical and clerical staff” and charge those administrative
costs against the earnings of the retirement fund. (Ibid.)
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LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
The Assembly Retirement Committee’s bill analysis noted
that the County opposed the legislation and included a copy of a
letter from Los Angeles County Treasurer and Tax Collector
Harold Ostly. (Assem. Retirement Com. analysis, supra, p. 1.)
Ostly’s letter argued that retirement board members lacked the
“expertise” to decide what personnel were necessary to
administer the retirement system and contended that county
treasurers were better equipped to carry out such duties.
(Harold J. Ostly, County of Los Angeles Office of the Treasurer
and Tax Collector, letter to Assemblyman Bob Wilson, Apr. 17,
1973, at p. 1 (Ostly Letter).) Ostly also argued that the proposed
bill would effectively “create . . . new units of county government
with no cost controls as we now know them in county operations
other than the limiting feature of 1/l0th of 1% of the total
assets.” (Ibid.) To remedy these perceived harms, Ostly’s letter
proposed that section 31522.1 be amended to state that “The
county treasurer may appoint such . . . personnel as are required
to carry out the necessary work” of the retirement boards and
further proposed that section 31580.2 be amended to assign
budgeting authority to the county. (Ostly Letter, at p. 1, italics
added.) Those amendments were rejected.
Numerous other counties with CERL-governed retirement
systems raised similar concerns. The Treasurer for Sacramento
County, for example, explained that it was “one of several
counties which has opposed this bill on the basis that no county
board should be allowed to appoint staff without being subject
to the budgetary control of the Board of Supervisors.” (H.B.
Alvord, Sacramento County Treasurer-Tax Collector, letter to
Governor Ronald Reagan, July 3, 1973 (Alvord Letter); see
Harrott v. County of Kings (2001) 25 Cal.4th 1138, 1162, fn. 4
[considering letters to the governor that were “consistent with
16
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
the legislative language and history”].) The letter contended
that Assembly Bill 470 “would be similar in effect to the [federal
government] passing a bill allowing the Public Employees
Retirement System to make expenditures from out of public
employees retirement funds without any budgetary control of
the State.” (Alvord Letter.) The County of Orange argued that
the bill would leave county treasurers with “no control of [the
pension plan’s] administration” (Robert L. Citron, County of
Orange Tax Collector-Treasurer, letter to Governor Ronald
Regan, July 6, 1973), while the County of Mendocino complained
that it would “completely remove[]” all “[b]udgetar[y]
responsibilities . . . from the Board of Supervisors which is . . .
contrary to good administrative policies.” (Sam Ray, Jr.,
Retirement Administrator of County of Mendicino Employees
Retirement Association, letter to Governor Ronald Reagan, July
5, 1973.) The counties of Kern, Alameda, Marin and others
likewise voiced objections regarding the lack of control that
boards of supervisors would have over the retirement system.
In my view, the letter from Treasurer Ostly (which was
expressly discussed and attached to the Retirement
Committee’s bill analysis) and the other letters from county
administrators contradict the majority’s assertion that “nothing
in the legislative history” (maj. opn., ante, at p. 64) suggests that
the proposed bill would withdraw the counties’ “classification
and salary-setting authority over retirement system personnel.”
(Ibid.) Ostly’s complaint that county treasurers, not retirement
boards, were in the best position to evaluate what personnel
were necessary to administer the retirement system would
make little sense if he believed that the bill would allow counties
17
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OF LOS ANGELES
Groban, J., dissenting
to override retirement board personnel decisions.7 And the
complaint that the legislation would leave the county with “no
cost controls” (Ostly Letter, supra, at p. 2) over retirement
boards apart from the statutory spending cap would make little
sense if the counties believed that the county would retain
approval authority over the salaries of retirement system
personnel, which comprises a vast majority of the system’s
budget.
It also bears emphasizing that the Legislature rejected a
proposal from Los Angeles County Treasurer Ostly that the text
of sections 31522.1 and 31580.2 be amended to assign county
treasurers appointment and budgeting authority. In light of
that history, Ostly would no doubt be both pleased and surprised
by the majority’s reading of CERL, which effectively imposes the
very amendments to sections 31522.1 and 31580.2 that he had
unsuccessfully lobbied for in 1973.
The majority takes a different view of the legislative
history by focusing on a single passage in a single enrolled bill
report that states: “Apparently, appointment of [retirement
system] employees falls within the jurisdiction of the Board of
Supervisors as in other county departments. The bill ·would
vest such appointing authority in the two administrative boards
7
The majority contends that the letter from Ostly cannot be
fairly construed as arguing that that retirement board members
lacked the expertise to decide what personnel were necessary to
administer the retirement system. (See maj. opn., ante, at p. 65,
fn. 21.) But Ostly’s letter specifically states that retirement
board members and investment board members are elected “for
their expertise in matters of benefits and investments, not . . .
for their administrative background.” (Ostly Letter, supra, at
p. 1, italics added.)
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LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
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subject however, to county civil service and salary fixing
authority.” (Agriculture and Services Agency, Enrolled Bill Rep.
on Assem. Bill 470 (1973–1974 Reg. Sess.) July 5, 1973, italics
added.) According to the majority, “[t]his report thus confirmed
that . . . the bill would preserve counties’ traditional ‘salary
fixing authority.’ ” (Maj. opn., ante, at p. 64.)
Enrolled bill reports are prepared by executive branch
personnel after the bill has passed both houses of the legislature.
(See In re Lucas (2012) 53 Cal.4th 839, 855, fn. 13.) It is exactly
for that reason that we place little weight on such reports (see
Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1218, fn. 3)
and will generally consider them only when they “reflect[] the
same understanding” that is shown in other legislative
materials. (Elsner v. Uveges (2004) 34 Cal.4th 915, 934.) In this
case, there is not another statement anywhere in the legislative
history suggesting that Assembly Bill 470 would leave salary-
setting in the control of the counties. Moreover, the enrolled bill
report’s isolated statement to that that effect appears to conflict
with the arguments in opposition to the bill that were detailed
in the Assembly Retirement Committee’s analysis, which
complained that the legislation would leave counties with “no
cost controls” (Ostly Letter, supra, at p. 1) over the
administration of retirement board system. (See Whitley, at
p. 1218, fn. 3 [enrolled bill reports “certainly do not take
precedence over more direct windows into legislative intent such
as committee analyses”].)
B. The Majority’s Analysis
1. Application of the home rule
The majority’s statutory analysis largely sidesteps
language in sections 31522.1 and 31580.2 that expressly
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OF LOS ANGELES
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delegates appointment and budgeting authority to the
retirement boards. Instead, the majority adopts the County’s
argument that CERL provides counties “home rule” authority
over retirement system staff, which necessarily includes the
power to approve (and reject) classification and salary requests.
(See maj. opn., ante, at pp. 57–59, 70–74.)
a. Designation of retirement personnel as “county
employees”
The majority’s home rule arguments initially focus on
section 31522.1’s directive that retirement system personnel
appointed by the retirement boards “shall be county employees.”
According to the majority, this language shows that the
Legislature intended that these personnel would be subject to
constitutional home rule provisions that assign county boards of
supervisors the “authority to appoint and fix the compensation
of all County employees.” (Maj. opn., ante, at p. 15; see id. at
p. 49 [§ 31522.1 “directs that retirement system personnel are
county employees subject to the county’s [constitutional] salary-
fixing authority”].)
The County’s own 1996 opinion letter expressly rejected
that reading of section 31522.1, explaining: “LACERA
employees are not County employees in any general sense. They
are not County employees by virtue of the County Charter,
which requires the Board of Supervisors to provide for the
number, classification, compensation, and appointment of
County employees . . . . Rather, LACERA employees are made
County employees by statute for rather limited purposes
primarily relating to the manner of their appointment and their
tenure [i.e., civil service protections] . . . [and] to allow them to
participate in the retirement system.” (1996 Opinion Letter,
supra.)
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OF LOS ANGELES
Groban, J., dissenting
There are several reasons why I find the County’s prior
interpretation of the phrase “county employees” more
convincing than the interpretation it (and the majority) embrace
today. As a starting point, the fact that section 31522.1
expressly authorizes retirement boards to “appoint” (italics
added) retirement system personnel casts significant doubt on
the idea that the phrase “county employees” was meant to
signify that such personnel are subject to the home rule
provisions. Among the powers listed in those home rule
provisions is the “ ‘appointment’ ” of county employees. (Maj.
opn., ante, at p. 17 [“ ‘Under the “home rule” doctrine, . . . the
county’s right to provide “for the number, compensation, tenure,
and appointment of employees” . . .’ take precedence over
conflicting state laws”], italics added; see Cal. Const., art. XI,
§ 1, subd. (b) [county boards of supervisors shall “provide for the
number, compensation, tenure, and appointment of [county
employees]”], italics added]; see also § 25300 [boards of
supervisors “shall provide for the . . . appointment . . . of county
employees”], italics added].) If the Legislature truly intended
for retirement system staff to be subject to home rule authority,
it seems quite odd that it would assign retirement boards one of
the powers that the home rule expressly delegates to counties.
The majority’s interpretation is further undermined by
other sections of CERL that use the phrase “county employee”
to describe certain categories of retirement system staff who do
not appear to be subject to home rule authority. Section
31522.4, for example, authorizes LACERA to appoint various
classes of senior retirement system staff. Like section 31522.1,
the statute directs that persons appointed under this statute
“shall be county employees” and “shall be included in the salary
ordinance.” (§ 31522.4, subd. (a).) Unlike section 31522.1,
21
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OF LOS ANGELES
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however, the statute states that these appointees shall be
exempt from civil service rules and are deemed to “serve at the
pleasure of, and may be dismissed at the will of, the appointing
board or boards.” (§ 31522.4, subd. (a).) That delegation of
authority is in obvious conflict with the home rule provisions,
which assign counties authority to determine the “tenure” (Cal.
Const., art. XI, § 1, subd. (b)) and “manner of . . . removal” of
county employees (id. at § 4, subd. (f)). Clearly then, the term
“county employee” as used in section 31522.4 does not mean that
the county has home rule authority over persons appointed
under that statute. Section 31522.3, subdivision (a) contains
identical provisions regarding the appointment of certain
classes of retirement staff in other counties. The fact that
sections 31522.3 and 31522.4 use the phrase “county employee”
to describe classes of retirement system staff who are not subject
to the home rule casts doubt on the majority’s conclusion that
the use of that same phrase in section 31522.1 is intended to
signify that such personnel are subject to the home rule. (See
People v. Jones (1988) 46 Cal.3d 585, 595 [“ ‘It is presumed . . .
that a repeated phrase or word in a statute is used in the same
sense throughout’ ”].)
The majority’s suggestion that the use of the phrase
“county employees” was meant to make retirement system
personnel subject to the home rule provisions would also
effectively render meaningless section 31522.1’s requirement
that the appointments “shall be included in the salary ordinance
or resolution adopted by the board of supervisors for the
compensation of county officers and employees.” As the majority
acknowledges, if retirement system personnel were truly
intended to be “county employees” for purposes of the home rule,
counties would already have a mandatory constitutional (and
22
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OF LOS ANGELES
Groban, J., dissenting
statutory) duty to include these personnel in the salary
ordinance. (See maj. opn., ante, at p. 56; Cal. Const., art. XI, §§
1, subd. (b), 4, subd. (f); Gov. Code, § 25300.) Thus, there would
have been no need for section 31522.1’s directive that such
personnel shall be included in the salary ordinance, which would
be redundant of those preexisting obligations. (See People v.
Hudson (2006) 38 Cal.4th 1002, 1010 [“we have [repeatedly]
stressed . . . [that] interpretations that render statutory terms
meaningless as surplusage are to be avoided”].)
In an attempt to ascribe meaning to section 31522.1’s
requirement that retirement board appointments shall be
included in the salary ordinance, the majority concludes that
this language is “consistent” with the requirement that county
employees’ “salaries must be prescribed by ordinance according
to longstanding constitutional and statutory provisions.” (Maj.
opn., ante, at p. 56.) But under the majority’s interpretation,
section 31522.1’s directive is not merely “consistent” with those
“longstanding” constitutional requirements but is entirely
duplicative of them. For this reason, the majority’s reasoning
still renders this language surplusage.
In a further attempt to give the language meaning, the
majority argues that while “applicable law does appear to
require the inclusion of county employees’ compensation in a
salary ordinance or resolution” (maj. opn., ante, at p. 57, fn. 19),
the Legislature may have nonetheless been concerned that
courts would not construe those other sources of law as imposing
such a requirement. In my view, that is a highly unlikely
explanation given that the Constitution includes clear and
unambiguous language that has long been understood to impose
those duties. (See id. at p. 56.)
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LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
Finally, the majority’s interpretation might be more
persuasive if there were no other logical reason why the
Legislature might have chosen to add language describing
section 31522.1 appointees as “county employees.” But the
history of CERL provides a ready explanation for that addition.
Section 31469 defines the term “employee” for purposes of CERL
to mean any officer or person “employed by a county whose
compensation is fixed by the board of supervisors[,] or by
statute[,] and whose compensation is paid by the county.”
(§ 31469, subd. (a), italics added.) As the majority explains,
“Section 31469’s definition is important because it identifies the
public employees who are eligible to participate in a CERL
system” and thus “entitled to CERL pension benefits.” (Maj.
opn., ante, at p. 51.) However, after the 1973 amendments, it
was no longer clear whether persons who were appointed by the
retirement boards under section 31522.1 and whose
compensation was paid from the pension plan assets under
section 31580.2 were still “employed by the county” within the
meaning of section 31469, subdivision (a) (and thus eligible to
participate in the retirement system). (See maj. opn., ante, at
pp. 61–62; see also Contra Costa County Retirement
Administrator Benjamin O. Russel, letter to Barry Brokaw,
Administrative Assistant to Assemblyman Daniel Boatright,
Mar. 12, 1979 (Russell Letter) [explaining that “a question has
been raised [by some county officials] on whether the employees
[appointed under § 31522.1] would” be county employees].) The
addition of the phrase “county employees” remedied that
confusion.
As the majority acknowledges, there is very little
legislative history explaining why the term “county employees”
was added to section 31522.1. This amendment was added in
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OF LOS ANGELES
Groban, J., dissenting
1979 as part of Assembly Bill 132 (Reg. Sess. 1978–1979), which
also raised the spending cap on retirement boards’ budgeting
authority. (See stats. 1979, ch. 55, §§ 1, 2, p. 136.) Almost all of
the legislative history focuses on that portion of the bill. The
only substantive discussion of the “county employee” language
is in a letter from the Contra Costa County Treasurer who
proposed making that change. The letter explained to the bill’s
sponsor (Assemblyman Daniel Boatwright) that the addition of
“[c]ounty employees” was intended to “make[] it clear that the
staff of the Retirement Association continues to be county
employees,” which was “declaratory of existing law.” (Russell
Letter, supra.)
The majority concludes from this history that the
amendment was meant to reaffirm that “the Legislature has
always, and continues to, regard retirement system staff as
county employees, subject to the county’s” classification and
salary-fixing authority under the home rule. (Maj. opn., ante, at
p. 63.) But as the majority itself acknowledges, the purpose of
the amendment appears to have been to ensure that retirement
system personnel remained “employees” within the meaning of
CERL. (See maj. opn., ante, at pp. 61–62.) In light of that
purpose, it is reasonable to read that provision not as
transforming such personnel into county employees for all
conceivable purposes, but rather to clarify that they remained
employees for purposes of section 31469.8
8
This reading finds further support in provisions of CERL
that, as discussed above, allow the retirement boards in some
counties to appoint executive personnel who serve at the will of
the retirement boards. (See dis. opn., ante, at pp. 21–22). While
those executives do not appear to be subject to home rule
authority, they are nonetheless described as “county employees”
25
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
I view that narrow interpretation of the 1979 amendment
to be more persuasive than the far broader reading proposed by
the majority. In the end, I find it unlikely that despite having
expressly assigned the retirement boards authority to appoint
their own staff and set their own budgets, the Legislature’s
inclusion of the term “county employees” was meant to ensure
that the county retains final say over the retirement personnel
appointments and expenditures related to salary. If that were
truly the Legislature’s intention, I would think they would have
said so expressly.
b. LACERA’s interpretation of section 31522.1
does not violate the home rule provisions
In a variation on its argument that section 31522.1’s
description of retirement system staff as “county employees”
shows that the Legislature intended that these personnel would
be subject to home rule authority, the majority argues that it
would likely violate the constitutional home rule provisions to
interpret the statute any other way. (See maj. opn., ante, at
pp. 70–74.) As I understand it, in an argument that not even
the County has made, the majority’s position is that when CERL
was enacted in 1937, it was the intent of the Legislature that
retirement system personnel would be treated as county
employees for purposes of the home rule. And because they
who must be included in the county salary ordinance. (See ibid.)
Thus, the only apparent purpose of describing them as “county
employees” is, as stated by the majority, to ensure that those
personnel fall within “CERL’s definition of an ‘ “[e]mployee” ’
[who is] eligible to receive retirement benefits.” (Maj. opn., ante,
at pp. 56–57, fn. 19.) In my view, the use of that identical
language in section 31522.1 is most reasonably construed as
serving the same purpose.
26
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OF LOS ANGELES
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qualified as home rule county employees in 1937, it would have
been unconstitutional for the Legislature to “unilaterally
revoke” (maj. opn., ante, at p. 71) that home rule authority when
it enacted Senate Bill 470 in 1973. That line of reasoning,
however, is predicated on the assumption that retirement board
staff were county employees for purposes of the home rule prior
to section 31522.1’s passage — presumably since the time of
CERL’s enactment. But the majority does not fully explain how
it concludes that this was the original intent of the Legislature
when CERL was adopted in 1937.
In my view, there are significant reasons to doubt the
majority’s conclusion. To begin with, the majority has not
identified any provision in the original version of CERL stating
(or even suggesting) that personnel who aid the retirement
board in managing the retirement system are subject to home-
rule authority. Indeed, the original version of CERL appears to
be entirely silent about retirement system staff. As the majority
notes, without any statutory guidance on the issue, it appears
that some counties chose to appoint county employees to aid the
retirement boards in their administrative duties. But that
practice does not seem to have derived from any provision in
CERL itself. I fail to see how the counties’ voluntary decision to
appoint county employees to aid the retirement boards in their
work shows that the Legislature always intended that any
CERL-governed retirement system staff would fall under the
counties’ home-rule control.
The idea that the Legislature always intended that
retirement board personnel would be subject to home rule
authority is further undermined by well-established case law
recognizing that retirement boards are not “agent[s] for the
county,” but rather serve as “independent entit[ies] established
27
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
pursuant to the [CERL].” (Traub v. Board of Retirement (1983)
34 Cal.3d 793, 798 (Traub); see maj. opn., ante, at p. 8 [“Despite
. . . ties to county government, a CERL retirement board is not
a mere agent of the county. A retirement board is . . . ‘an
independent entity’ [citation] with a ‘distinctive identity,
constituency and interests’ ”].) In Traub we explained that
retirement boards have interests that are “distinct[]” from those
of the county and have a “constituency [that] is not limited to
county employees, but [rather extends to] . . . employees of
various political subdivisions and districts” that are unaffiliated
with the county. (Traub, at pp. 798, 799.) Prior to our decision
in Traub, an unbroken line of authority from our Courts of
Appeal had likewise concluded that “retirement associations
created under [CERL] are organizations totally ‘distinct from
the county.’ ” (Summerford v. Board of Retirement (1977)
72 Cal.App.3d 128, 132, quoting Flaherty v. Board of Retirement
(1961) 198 Cal.App.2d 397, 404; see Preciado v. County of
Ventura (1983) 143 Cal.App.3d 783; 788 [“An association formed
under [CERL] is separate and distinct from the county”].) In the
absence of any provision explicitly stating as much, I am
dubious that the Legislature intended to give counties home rule
authority over the staff of a statutorily created, independent
agency that has interests that are distinct from those of the
county and that serve a constituency beyond the county itself.
The majority attempts to downplay the significance of the
well-established line of authority holding that CERL-governed
retirement boards are (and have always been understood to be)
independent agencies by arguing that those cases merely held
that privity does not exist between a retirement board and a
county. I read Traub differently. Traub did not merely hold
that a retirement board has “independence from the county for
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OF LOS ANGELES
Groban, J., dissenting
[purposes of] privity.” (Maj. opn., ante, at p. 45.) Rather, Traub
held that privity between the retirement board and the county
was lacking because a CERL-governed retirement board is an
independent entity, with an “identity [and] . . . interests” that
are “distinct[]” from the county itself. (Traub, supra, 34 Cal.3d
at p. 799.) Stated differently, the “contextual”
“ ‘circumstances’ ” (maj. opn., ante, at p. 72) we relied on in
finding a lack of privity was the fact of the retirement board’s
status as an independent agency.
The majority’s suggestion that it was always understood
that CERL gave counties home rule authority over retirement
system staff also overlooks that the policy rationale underlying
the home rule is largely absent here. The general purpose of the
home rule is to protect “ ‘the right of the populace of a local area
to create . . . their own local governments . . . and prevent
interference by the state government with what they have
created.’ ” (Younger v. Board of Supervisors (1979)
93 Cal.App.3d 864, 869; see Ex Parte Braun (1903) 141 Cal. 204,
209 [“the object of the [home rule] amendment was to . . . deprive
the legislature of the power, by laws general in form, to interfere
in the government and management of the municipality”].)
CERL, however, established an optional employee pension
system that counties were given the choice of adopting. Under
the structure of CERL, the retirement boards are independent
entities that are (and have always been) vested with the
authority to “manage[] . . . the retirement system.” (§ 31520; see
stats. 1937, ch. 677, § 55, p. 1903.) The majority has not
identified any provision in the 1937 enactment suggesting that,
despite their status as independent agencies with managerial
control of the pensions system, any persons carrying out the
29
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
functions of the retirement boards would necessarily be treated
as county employees subject to the home rule.9
9
The majority argues that it is immaterial whether any
provision in CERL provided that retirement board staff would
serve as county employees because the home rule “derive[s]”
“not from CERL,” but “from article XI of the Constitution.” (Maj.
opn., ante, at p. 71, fn. 25; see ibid. [application of home rule
does not turn on whether the Legislature “saw fit” to “define”
retirement board staff as “county employees”].) But it is
undisputed that the home rule only applies to personnel who are
in fact employees of the county. If CERL never intended that
retirement board staff were to be treated as employees of the
county for purposes of the home rule it is unclear why the home
rule would ever apply. Thus, to determine whether the home
rule applies, we must necessarily look at the provisions of CERL
itself.
This approach does not “turn our home rule jurisprudence
on its head and eviscerate these provisions.” (Maj. opn., ante, at
p. 71, fn. 25.) As explained above, the purpose of the home rule
is to prevent the state from interfering in county governance.
(See dis. opn., ante, at p. 29.) In this case, the state did not
require that counties run their retirement systems in any
specific way. Instead, CERL offered the counties the option of
adopting entirely voluntary rules and regulations for
administering their local retirement systems. It is therefore
appropriate to look to that statutory scheme to determine the
applicable rules governing the administration of the counties’
retirement systems. And I see no provision in the 1937
enactment suggesting that the staff of retirement boards, which
are independent entities vested with the authority to manage
the retirement systems, would be treated as county employees.
In the absence of any such provision, I do not see how the
Legislature’s decision to allow retirement boards to make their
own staffing decisions can be said to have “interfered” with the
counties’ right to choose how they wanted to be governed. Again,
the counties that are governed by CERL chose to be governed by
CERL.
30
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
Notwithstanding that structure, the County voluntarily
chose to establish a CERL-governed retirement system. If the
County wanted to establish a type of pension plan that gave it
greater control over the entities and employees that administer
the plan, it could have done so, like many other counties chose
to do. It is difficult to understand why constitutional provisions
that are intended to “prevent state encroachment on counties’
core powers” (maj. opn., ante, at p. 70) would have been
understood to apply to a statutory scheme that was entirely
voluntary.
Finally, the majority’s assertion that it would likely be
unconstitutional for a Legislature to unilaterally withdraw
retirement system staff from home rule authority would seem to
raise significant questions about the validity of various
“legislative grants of authority to retirement boards.”
(LACERA, supra, 102 Cal.App.5th at p. 1216.) As explained
above, some sections of CERL authorize retirement boards in
specified counties to appoint executive retirement system
personnel who are to “serve at the pleasure of, and may be
dismissed at the will of, the appointing board or boards.” (§
31522.3, subd. (a); see 31522.4, subd. (a) [same]; dis. opn., ante,
at pp. 21–22.) Such a delegation of authority would seem to
stand in clear conflict with the home rule, which assigns
counties the authority to determine the terms of their
employees’ “ ‘tenure’ ” (maj. opn., ante, at p. 3) and “ ‘the manner
of their . . . removal’ ” (id., at p. 42).10
10
The majority posits that despite impinging on county
home rule authority, sections 31522.3 and 31522.4 may
nonetheless be valid because the counties affected by those
provisions “voluntar[ily] participat[ed]” in their enactment.
(Maj. opn., ante, at p. 73; see id. at fn. 26.) The only authority
31
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
Although the validity of statutes like sections 31522.3 and
31522.4 are not at issue in this case, I am concerned that the
majority’s broad holding may substantially limit the
Legislature’s ability to regulate how much control retirement
boards may exert over the very personnel that are appointed to
administrate the retirement system.
2. Civil Service rules
The majority also suggests that assigning retirement
boards classification and salary-setting authority would be
incompatible with section 31552.1’s directive that retirement
personnel “shall be subject to the county civil service . . . rules.”
The majority does not, however, provide any explanation why
that is so. The civil service rules require that the County Chief
Executive Officer maintain a classification for “all positions”
within the county, which includes a “schedule of compensation.”
(L.A. County Civil Service Rules, Rule 5.01(A), (B)(4).) But the
civil service rules also provide detailed procedures that govern
numerous other aspects of the employment relationship,
including how candidates are recruited, selected, evaluated and
disciplined. They likewise establish procedures that govern
employee discrimination claims and the implementation of cuts
to the work force.
I see no obvious reason why giving retirement boards the
authority to fashion their own classifications and salary
the majority cites in support of that conclusion is legislative
reports that lack any explicit statement of opposition from the
affected counties (and in the instance of section 31522.3, one of
the four affected counties was in favor of the measure). (See
maj. opn., ante, at p. 73, fn. 26.) But the application of the home
rule cannot turn on whether or not the statute in question was
formally opposed by counties during the legislative process.
32
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
schedules would create a conflict with the civil service rules.
The two schemes can co-exist. Under LACERA’s interpretation,
the statute effectively imposes a ministerial duty on the counties
to adopt the retirement boards’ classification requests, while
simultaneously requiring LACERA to provide retirement
system personnel with all of the procedural protections that the
civil service rules extend to county employees.
Indeed, it appears that is exactly what occurred during the
40-year period that preceded the current dispute. As the County
explained in its 1996 opinion letter, while LACERA has
classification and salary setting authority, its “employees
[remain] subject to the County Civil Service System in the sense
that they have Civil Service protection and must be appointed
from eligible lists ‘created in accordance with the civil service or
merit system rules of the county.’ ” (1996 Opinion Letter,
supra.) Under that shared understanding of the statutory
scheme, LACERA would prepare a memorandum for the board
of supervisors detailing the personnel changes. (See dis. opn.,
ante, at p. 7.) The memorandum would typically include a
classification and salary schedule drafted by LACERA staff.
The boards of supervisors would then adopt the classification
that LACERA had drafted into its salary ordinance, as required
under section 31522.1. (See § 31522.1 [“The personnel . . . shall
be included in the salary ordinance or resolution adopted by the
board of supervisors for the compensation of county officers and
employees”].) LACERA’s relationship with its appointees, in
turn, was governed by the other procedures laid out in the civil
service rules. The parties apparently had no issues operating
under that bifurcated approach during the four decades that
preceded this dispute. That extensive history would seem to
belie any suggestion that assigning LACERA classification and
33
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
salary setting authority would create an irreconcilable conflict
with the civil service rules.
I also find it notable that the County has never argued
that giving retirement boards statutory authority to establish
classifications and set compensation levels for retirement
personnel would create an irreconcilable conflict with the civil
service rules. Instead, the County’s primary concern regarding
the civil service rules is that LACERA’s proposed interpretation
of Proposition 162 — i.e., that the proposition gives retirement
boards constitutional authority over all aspects of personnel
decisions — would cast doubt on the validity of section 31522.1’s
requirement that retirement plan personnel are subject to the
civil service system. (See maj. opn., ante, at p. 77 [LACERA’s
assertion that Proposition 162 assigns retirement boards
“ ‘complete and absolute’ authority over personnel decisions”
would effectively “nullify” and “override” section 31522.1’s
directive that retirement personnel shall be subject to the civil
service rules].) LACERA’s statutory interpretation of CERL,
however, does not implicate any such concerns. In my view,
interpreting CERL as assigning retirement boards the statutory
authority to establish new classifications is entirely compatible
with section 31522.1’s requirement that the civil service rules
govern the terms of employment of persons who are ultimately
hired into those classifications.
3. Subsequent legislation exempting some retirement
system personnel from the civil service rules
Looking beyond the text of section 31522.1, the majority
next argues that its interpretation is supported “to some degree”
(maj. opn., ante, at p. 65) by subsequent amendments to CERL
that exempted certain (in one case all) employees within four
retirement systems from the county civil service system. Each
34
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
of those amendments included language stating that the
specified personnel “may not be county employees but shall be
employees of the retirement system.” (§ 31522.5, subd. (b); see
§ 31522.7, subd. (b) [same]; § 31522.11, subd. (b) [same]; see also
§ 31522.9, subd. (a).) Some of the legislative materials
accompanying these bills suggested that the amendments
would, among other things, allow retirement boards to offer
their employees’ higher salaries. (See maj. opn., ante, at p. 68.)
The majority draws broad conclusions from these materials,
arguing that they show that: (1) the intent of the subsequent
amendments was “to shift salary-setting power from counties to
retirement boards” (id. at p. 70), which would have been
unnecessary if retirement boards already had such authority
under section 31522.1; and (2) the Legislature has always
understood that “absent a specific exception, county
governments have final authority over the classification and
compensation of retirement board personnel” (maj. opn., ante, at
p. 66).
There are multiple problems with this line of argument.
First, the amendments the majority rely on were passed
between 2002 and 2015, while sections 31522.1 and 31580.2
were enacted in 1973. Unlike the majority, I am not persuaded
that this series of amendments provide a “strong indication”
(maj. opn., ante, at p. 70) of what the Legislature intended when
it passed Assembly Bill 470 some three decades earlier (or when
it first enacted CERL some seven decades earlier). (See, e.g.,
Western Security Bank v. Superior Court (1997) 15 Cal.4th 232,
244 [“there is little logic and some incongruity in the notion that
one Legislature may speak authoritatively on the intent of an
earlier Legislature’s enactment when a gulf of decades
separates the two bodies”]; Peralta Community College Dist. v.
35
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
Fair Employment & Housing Com. (1990) 52 Cal.3d 40, 52 [“The
declaration of a later Legislature is of little weight in
determining the relevant intent of the Legislature that enacted
the law”].) The majority provides little explanation why actions
taken by the Legislature in 2002 should inform our views as to
the Legislature’s intent was in 1973 or 1937.
Second, while the majority contends that these
amendments “were specifically intended to shift control over
compensation . . . from the counties to their retirement boards”
(maj. opn., ante, at p. 67), their impact went far beyond the issue
of compensation. Rather, the amendments removed certain
retirement system personnel from every aspect of county control,
including the civil service rules. Thus, the retirement boards
were enabled to develop their own procedures regarding all
elements of employment, including recruiting, hiring, discipline
and termination. Thus, while the majority’s analysis posits that
the primary purpose of these subsequent amendments was to
shift salary setting to the retirement boards, it appears that
their true intent was to transform the retirement personnel of
some retirement systems into at-will employees of the
retirement board. I am not persuaded that the Legislature’s
decision to withdraw some retirement personnel in four
specified counties from the civil service system and make them
employees of the retirement system for all purposes shows that
sections 31522.1 and 31580.2 were not intended to give
retirement boards classification and salary-setting authority
when those provisions were passed in 1973.
And even if we were to assume that the primary purpose
of these amendments was to shift salary setting to the
retirement boards, the majority overlooks the possibility that
this may well have been done to remove any uncertainty as to
36
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
whether Assembly Bill 470 meant to convey such authority. The
legislative history of one of these newly added provisions —
section 31522.9 — indicates that there was substantial
uncertainty on that issue. As detailed in the Court of Appeal’s
decisions, section 31522.9 was added to the Government Code
after Contra Costa County got into a dispute with its retirement
association (the CCCERA) regarding the county’s authority to
include CCCERA personnel in a memorandum of understanding
(MOU) agreeing that all county employees would be furloughed.
The legislative reports analyzing the bill stated that it was
unclear whether the county had such authority because,
“ ‘[u]nder existing law, the CCCERA Board has authority to
establish compensation for retirement system employees,’ ” but
“ ‘the Board of Supervisors has responsibility to establish civil
service rules and enter MOUs for all county employees.’ ”
(LACERA, supra, 102 Cal.App.5th at p. 1226, quoting Sen.
Public Employment and Retirement Com., Analysis of Sen. Bill
No. 673 (2013–2014 Reg. Sess.) as amended Jan. 6, 2014, p. 3,
italics added (Sen. Public Employment and Retirement Com.
Bill Analysis); see Sen. 3d reading analysis of Sen. Bill No. 673
(2013–2014 Reg. Sess.), as amended Jan. 23, 2014, at p. 3;
Assem. Com. on Public Employment, Retirement and Social
Security, Analysis of Sen. Bill No. 673 (2013–2014 Reg. Sess.) as
amended Jan. 23, 2014, p. 3.) The parties settled the dispute by
agreeing to jointly seek legislation making clear that retirement
system staff were the employees of CCCERA for all purposes,
which ultimately resulted in the adoption of section 31522.9.
This history conflicts with the majority’s assertion that
these subsequent amendments “consistently display an
understanding [among the Legislature] that, absent a specific
exception,” counties retained final authority over salary setting.
37
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
(Maj. opn., ante, at p. 66.) Indeed, the legislative reports
analyzing section 31522.9 make clear that there was no uniform
understanding on that issue. Several of those reports
specifically state that, under existing law (i.e., before the
“specific exception” was passed), the retirement board had
authority to establish compensation for retirement system
employees.11 (See dis. opn, ante, at p. 37.) And section 31522.9
was specifically intended to resolve a disagreement regarding
whether a county had authority to take actions that affected the
compensation of retirement system staff. Section 31522.9
removed any doubt as to that issue by making CCCERA
personnel the employees of CCCERA for all purposes.
11
The majority dismisses the relevance of this language by
arguing that it appears in a section of the legislative report
discussing “the claims in a lawsuit that ultimately gave rise to
the legislation in question.” (Maj. opn., ante, at p. 69, fn. 24.)
But the statement in question was not describing the claims that
the parties had made in the lawsuit. Instead, the statement was
made as part of an explanation regarding how existing law had
led to the parties’ disagreement. More specifically, the
legislative report explained that “[u]nder existing law, the
CCCERA Board has authority to establish compensation for
retirement system employees” while “the Board of Supervisors
has responsibility to . . . enter MOUs for all county employees.”
(Sen. Public Employment and Retirement Com. Bill Analysis,
supra, at p. 3; see dis. opn., ante, at p. 37.) The parties’ dispute,
in turn, centered not on whether CCCERA had authority to set
compensation, but on whether the county was permitted to enter
into an MOU that effectively reduced the salary of retirement
system personnel in light of CCCERA’s salary-setting authority.
Thus, I read these reports not as discussing claims in a lawsuit,
but as affirmatively informing legislators that one of the
circumstances that led to the lawsuit was that under existing
law the CCCERA had authority to establish compensation of
retirement system staff.
38
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
The history of section 31522.9 and the current dispute
between LACERA and the County both illustrate that there has
been some level of uncertainty whether the 1973 amendments
were intended to assign retirement boards the authority to set
the salaries of retirement system personnel. That uncertainty
is why we granted review in this case and why our court is
divided on the issue. But the fact that the Legislature took steps
to remove that uncertainty for some retirement system
employees in no way indicates, as the majority suggests, that
the majority’s interpretation of section 31522.1 is the correct
one.
4. Interference with the “cooperative process”
The majority next turns to policy justifications, arguing
that giving counties final authority over classification and
salary setting would better “preserve[] the collaborative
relationship” (maj. opn., ante, at p. 78) that CERL envisions
“between retirement boards and [the counties] on issues related
to employee classification and compensation” (maj. opn., ante, at
p. 2). Citing an amicus curiae brief filed by the California State
Association of Counties, the majority explains that “CERL
creates a type of ‘meet-and-confer process’ in which ‘the needs of
both the retirement system and the county are taken into
account.’ ” (Id. at p. 79.) According to the majority, the “long
history of successful collaboration between LACERA and the
County before the present dispute” demonstrates that this
cooperative system “ ‘works well.’ ” (Ibid.) The majority tells us
that interpreting CERL in a manner that allows the retirement
boards to establish classifications and set salaries would “upset
that balance by leaving these decisions to retirement boards
alone.” (Maj. opn., ante, at p. 2.)
39
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
I believe the majority has it backward. While warning us
that LACERA’s interpretation would threaten the “cooperative
process” (maj. opn., ante, at p. 80) that CERL envisions, the
majority overlooks a crucial fact: The parties’ “long history of
successful collaboration” (maj. opn., ante, at p. 79) occurred
within an environment in which the County expressly agreed
that the retirement boards “ha[d] only a ministerial role” in
approving the classification and salary requests that LACERA
submitted to it. (Beverly A. Campbell, Assistant Director of the
County of Los Angeles Department of Human Resources, letter
to Janice Golden, LACERA Personnel Officer, April 20, 1998.) I
see no reason why we would expect that cooperation to end were
we to simply confirm the reading of CERL that the parties had
shared during their long-running period of successful
collaboration. LACERA’s counsel confirmed as much at oral
argument, explaining that the retirement board anticipated
that the parties would continue to collaborate on personnel
decisions even if it was determined that LACERA ultimately
had final say over those decisions, just as they did in the decades
prior to their current dispute.
In the end, the County has made no showing that the
parties’ prior practice of allowing LACERA to create
classifications and set salaries caused any serious problems
between the parties. To the contrary, it appears that this
practice resulted in a long-running collaboration that broke
down only when the County abruptly changed course and
asserted veto authority over personnel decisions. I find decades
of a seemingly successful course of dealing far more persuasive
than the majority’s speculation about what might occur if we
turned the parties’ past practice on its head.
40
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
The majority likewise fails to account for the fact that
CERL assigns counties a significant amount of control over a
retirement board’s initial decision to approve new classifications
and salary ranges. Under CERL, county appointees control a
majority of the seats on the board of retirement, which must
approve personnel changes before they are ever submitted to the
boards of supervisors for inclusion in the salary ordinance.
Thus, any classification or salary change that reaches the board
of supervisors has already been approved by an entity that is
majority controlled by the county’s own representatives. To the
extent CERL envisions a “cooperative process” (maj. opn., ante,
at p. 80) between the retirement system and the county, it seems
that such cooperation is reflected in the composition of the
retirement board itself. But under the majority’s view, the
county not only controls a majority of seats on the board that
decides what classification and salary decisions are in the best
interests of the retirement system, but it also retains authority
to veto personnel decisions that were approved by that board.
How that outcome can possibly be said to preserve the “balance”
(maj. opn., ante, at p. 2) that CERL envisions is unclear.
5. Remedies
Finally, the majority attempts to mitigate the
consequences of its holding by clarifying that a county’s decision
to reject a personnel decision “remain[s] subject to judicial
review for abuse of discretion” by way of a writ of mandate.
(Maj. opn., ante, at p. 83.) Under that view, the county’s decision
to reject a classification or salary request would control “if
reasonable minds [could] disagree as to the wisdom of” its
actions. (California Public Records Research, Inc. v. County of
Stanislaus (2016) 246 Cal.App.4th 1432, 1443; see ibid. [“[w]hen
a court reviews a public entit[y’s] decision for an abuse of
41
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
discretion, . . . [the decision must be upheld] if reasonable minds
may disagree as to the wisdom of the public entity’s
discretionary determination”].)
Once again, I think the majority has it exactly backward.
While I agree that writ proceedings may play a role when the
“cooperative process” (maj. opn., ante, at p. 80) over retirement
board personnel decisions breaks down, I believe it is the
counties that should be required to seek such relief if they
believe that a retirement board has made an unreasonable
classification or salary decision.12 At its core, I view the
12
The majority questions whether the County would have
standing to pursue such a claim, noting that “when asked about
this possibility at oral argument,” LACERA’s counsel expressed
doubt whether counties would have standing to seek writ relief
“based on breach of fiduciary duty because LACERA owes a
fiduciary duty to members, not the county.” (Maj. opn., ante, at
p. 84, fn. 30.) While true that LACERA’s counsel was skeptical
that the County would have standing to bring claims against
LACERA based on breach of fiduciary duties, he readily
acknowledged that retirement system members would clearly
have standing to do so (a position that nobody seems to dispute).
Counsel also did not foreclose that, separate and apart from a
breach of fiduciary claim, there “m[ight] be other ways the
County could raise such a challenge.” It is not surprising that
counsel was hesitant to provide a definitive answer given that
“neither party . . . focused” on the question of remedies in their
briefing. (Maj. opn., ante at p. 82.)
In any event, I do not find it a “difficult task” (maj. opn.,
ante, at p. 84, fn. 30) to understand why the County would have
standing to bring a mandamus action to challenge a retirement
board’s unreasonable personnel decisions. A mandamus action
“is proper where . . . the claim is that an agency has failed to act
as required by law.” (California Assn. for Health Services at
Home v. Dept. of Health Services (2007) 148 Cal.App.4th 696,
705.) As the majority acknowledges, Proposition 162 and the
Government Code impose numerous duties on retirement
42
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
fundamental question in this case to be whether the Legislature
intended to give the retirement boards discretion to decide what
positions and salary ranges are necessary to properly
administer the retirement system or did it intend to assign that
discretion to the counties. Stated differently, whose views did
the Legislature intend to control when reasonable minds could
differ about the necessity of a personnel decision? Given that
CERL expressly vests retirement boards with the authority to
“manage[] . . . the retirement system” (§ 31520), to “appoint”
such personnel as are necessary to administer the system (§
31522.1) and to adopt an annual operating budget that is to be
paid from the system’s assets (§ 31580.2), I believe that the
Legislature intended that discretion to lie with the retirement
boards. For a span of nearly 40 years, the County and LACERA
both agreed with that conclusion.
But under today’s ruling, that discretion now resides
squarely with the board of supervisors. In so holding, the
majority has effectively created a system under which a public
boards, including that they use pension funds to defray only the
“reasonable expenses of administering the system.” (Cal.
Const., art. XVI, § 17, subds. (a), (b); see maj. opn., ante, at pp. 8–
9; 20–22.) Presumably, an unnecessary or wasteful personnel
expenditure would constitute a violation of those duties and
thus be challengeable in mandamus. And given that counties
make substantial capital contributions to maintain the solvency
of pension plans, they would have a clear “beneficial interest” in
ensuring that retirement funds do not waste those funds.
(People for Ethical Operation of Prosecutors etc. v. Spitzer (2020)
53 Cal.App.5th 391, 396, see id. at p. 407 [test of standing in
mandamus is whether the party is “ ‘beneficially interested’ ”];
Board of Retirement v. Santa Barbara County Grand Jury
(1997) 58 Cal.App.4th 1185, 1191 [retirement boards “run the
pension system . . . using substantial county funds”].)
43
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSN. v. COUNTY
OF LOS ANGELES
Groban, J., dissenting
entity charged with the management of in excess of $70 billion
in assets — the largest county pension system in the country —
must obtain permission from a separate political body (with
interests that may not always align with the interests of the
pension members) before creating a new position or giving its
employees a raise. The counties, in turn, now have license to
veto personnel requests that a retirement board, acting in its
capacity as a fiduciary, previously determined to be in the best
interests of its membership.
I remain hopeful that counties will take seriously the
majority’s directive that they must “give due weight” to a
retirement board’s personnel requests and collaborate on such
issues in “good faith.” (Maj. opn., ante, at p. 84.) And while I
appreciate the majority’s acknowledgment that a retirement
board may judicially challenge “not only the merits of a county’s
classification or compensation decision but also the process by
which that decision was reached” (id. at p. 83), I do not believe
that was the system that the Legislature envisioned when it
enacted sections 31522.1 and 31580.2. In my view, it seems far
more reasonable to conclude that is exactly the outcome that the
Legislature intended to avoid. I therefore dissent.
GROBAN, J.
We Concur:
LIU, J.
EVANS, J.
44
See next page for addresses and telephone numbers for counsel who
argued in Supreme Court.
Name of Opinion Los Angeles County Employees Retirement
Association v. County of Los Angeles
__________________________________________________________
Procedural Posture (see XX below)
Original Appeal
Original Proceeding
Review Granted (published) XX 102 Cal.App.5th 1167
Review Granted (unpublished)
Rehearing Granted
__________________________________________________________
Opinion No. S286264
Date Filed: August 3, 2026
__________________________________________________________
Court: Superior
County: Los Angeles
Judge: James C. Chalfant
__________________________________________________________
Counsel:
Latham & Watkins, Manuel A. Abascal, Nicholas Rosellini, Roman
Martinez and Uriel Hinberg for Plaintiff and Appellant.
Hanson Bridgett, Raymond F. Lynch, Judith W. Boyette and Matthew
J. Peck for Board of Retirement of the San Bernardino County
Employees' Retirement Association as Amicus Curiae on behalf of
Plaintiff and Appellant.
Benedon & Serlin, Judith E. Posner, Gerald M. Serlin, Wendy S.
Albers; Rothner, Segall & Greenstone, Julia Harumi Mass and Laura
Carver for the Coalition of County Unions and the Service Employees
International Union Local 721 as Amici Curiae on behalf of Plaintiff
and Appellant.
Law Office of Michael A. Conger and Michael A. Conger for Retired
Employees of Los Angeles County and California Retired County
Employees Association as Amici Curiae on behalf of Plaintiff and
Appellant.
Reed Smith, Maytak Chin, Kathryn M. Bayes; Saltzman & Johnson
Law Corporation, Russell Richeda; and Johnny Tran for the Boards of
Administration for the San José Police and Fire Department
Retirement Plan, the Federated City Employees’ Retirement System,
the Retirement Boards of the City of Fresno Employees Retirement
System, the City of Fresno Fire & Police Retirement System and the
Board of Administration for the San Diego City Employees’ Retirement
System as Amici Curiae on behalf of Plaintiff and Appellant.
Jeff Rieger for the Boards of Retirement of Alameda County
Employees’ Retirement Association, San Diego County Employees
Retirement Association, Ventura County Employees’ Retirement
Association, Sonoma County Employees’ Retirement Association,
Imperial County Employees’ Retirement System, San Mateo County
Employees’ Retirement Association, Sacramento County Employees’
Retirement System, Santa Barbara County Employees’ Retirement
System, San Bernardino County Employees’ Retirement Association,
San Joaquin County Employees’ Retirement Association, Stanislaus
County Employees’ Retirement Association, Mendocino County
Employees Retirement Association, Marin County Employees’
Retirement Association and Orange County Employees Retirement
System as Amici Curiae on behalf of Plaintiff and Appellant.
Bernstein Litowitz Berger & Grossmann, Anya Freedman; Deutsch
Hunt and Alexandra Mansbach for the National Conference on Public
Employee Retirement Systems as Amicus Curiae on behalf of Plaintiff
and Appellant.
Groom Law Group, Kelly A. Geloneck, Samuel I. Levin and David N.
Levine for the Los Angeles Water and Power Employees’ Retirement
Plan, the Los Angeles City Employees’ Retirement System and the San
Francisco City and County Employees’ Retirement System as Amici
Curiae on behalf of Plaintiff and Appellant.
Renne Public Law Group, Ryan P. McGinley-Stempel, Linda M. Ross
and Steve Cikes for Defendants and Respondents.
Jennifer Bacon Henning for California State Association of Counties as
Amicus Curiae on behalf of Defendants and Respondents.
Counsel who argued in Supreme Court (not intended for
publication with opinion):
Roman Martinez
Latham & Watkins LLP
555 Eleventh Street, NW, Suite 1000
Washington, DC 20004
(202) 637-3377
Ryan P. McGinley-Stempel
Renne Public Law Group
350 Sansome Street, Suite 300
San Francisco, CA 94104
(415) 848-7250