On August 14, 1997, the California Supreme Court rendered its landmark decision in Ventura County Deputy Sheriffs' Ass'n. v. Board of Retirement (1997) 16 Cal.4th 483. That opinion clarified the intent of the Legislature with regard to the manner in which pensions were to be calculated under the County Employees’ Retirement Law of 1937, which appears in California Government Code Sections 31450, et seq. Prior to Ventura, most of the twenty county retirement associations covered by the CERL only were including in the base upon which retirement allowances and contributions were calculated those items of cash remuneration automatically received by all employees in the same job classification on a uniform basis, and were excluding cash allowances which substituted for advantages, such as clothing, which the employees otherwise would have to purchase with their own funds. That approach was consistent with the decision of the Court of Appeal, First Appellate District, in Guelfi v. Marin County Employees’ Retirement Association (1983) 145 Cal.App.3d 297. Almost all of the Guelfi reasoning and conclusions were disapproved by the Supreme Court in Ventura, which held that retirement associations must include in the pension calculations (1) all cash allowances and (2) all remuneration paid in cash out of county funds in return for hours ordinarily worked by similarly situated employees, except for employer contributions to an employee’s deferred compensation account (which the Legislature expressly excluded). While the Retirement Associations in all of the twenty counties covered by the CERL implemented the holding in Ventura with regard to future earnings, eighteen of those Retirement Associations, including San Bernardino’s, declined to do so with respect to income earned prior to the date the Supreme Court denied a petition to rehear the matter, October 1, 1997. Lawsuits were brought in most of those counties, including the one filed by SEBA, to compel the Retirement Association to apply the principles enunciated in Ventura on a retroactive basis to all compensation earned prior to October 1, 1997. These lawsuits sought to recalculate the “final compensation” base upon which pensions were computed to include items of pay that were improperly omitted, irrespective of the date the individual retired, and to adjust each qualifying retiree’s pension accordingly retroactive to the earliest period allowed by applying the appropriate statute of limitations (i.e., three years prior to the date the litigation was commenced). In addition, many of these lawsuits, including SEBA’s, sought to add to the pension base additional items of remuneration not addressed by the Supreme Court in Ventura because that retirement association already was including those pay items in the pension calculations. These items consisted primarily of (1) payments to third parties, such as insurance carriers and retirement systems, to satisfy the employee’s obligation to make required payments and (2) cash-outs in connection with termination of paid leave benefits earned during the applicable measurement period. These lawsuits were all coordinated and assigned to then Judge (now Court of Appeal Justice) Stuart Pollak in the San Francisco County Superior Court. SEBA’s attorney, Stephen H. Silver of Silver, Hadden & Silver, served as the lead counsel for the Plan Members in these coordinated cases. He also was the attorney of record for the Plan Members in most of those cases. After lengthy discovery and briefing, Judge Pollak ruled that the Retirement Associations had erroneously failed to apply Ventura to earnings occurring prior to October 1, 1997. As a result, he ordered them to recalculate pensions of retirees whose pension base included earnings prior to October 1, 1997 (and eligible beneficiaries) to include items of pay that Ventura held were improperly excluded. He also ruled that the Retirement Associations have the discretion to recover arrears contributions that had not been collected prior to Ventura, although he retained jurisdiction to make sure that they did not do so in an arbitrary manner. Finally, Judge Pollak decided that the Retirement Associations did not have to (but could) include in the pension calculations the items of pay which the lawsuits sought to add. All Judge Pollak’s rulings were appealed to the Court of Appeal. Before the Court of Appeal rendered its decision, a settlement was reached with respect to the San Bernardino case filed by SEBA and another case filed by the San Bernardino Public Employees’ Association which literally copied the Complaint filed by SEBA. With respect to active safety members of the Retirement System(as of October 1, 2003, this settlement was tied to the negotiation and implementation of the enhanced 3% at age 50 retirement formula. The contracts negotiated with the County by SEBA on behalf of its safety members which provided for that enhanced formula were conditioned upon those individuals relinquishing all claims asserted by SEBA on their behalf in the pending litigation to add additional items of remuneration to the pension calculations. The settlement also impacted all Retirement System members who retired prior to October 1, 1997. The agreement provided that those safety members would receive an 8.25% increase in their pension retroactive to April 15, 1995 (three years prior to the time SEBA’s lawsuit was filed) or their date of retirement, whichever occurred later, irrespective of when they actually retired. In other words, an individual retiring in 1975 would still be entitled to this increase retroactive to April 15, 1995. Pre-October 1, 1997 non-safety retirees were awarded a 1.65% increase in their pensions, both retroactively and prospectively, like the safety members. Seven percent (7%) simple interest will be computed with respect to all sums due prior to the time the pensions are increased prospectively. Most significantly, no retroactive contributions would be collected from any of these retirees or their beneficiaries. The remaining class members, which consisted of (1) all safety and general members retiring between October 1, 1997 and October 1, 2003, the date the 3% at age 50 formula will become effective, and (2) all current active general members, will be bound by the outcome of the appeal of Judge Pollak’s ruling. In that regard, on July 11, 2003, the Court of Appeal issued a 66 page opinion (entitled In re Retirement Cases) upholding all of Judge Pollak’s determinations. Each side has petitioned the Supreme Court to review that portion of the Court of Appeal’s opinion that was adverse to its interest. Those Petitions are still pending before the Supreme Court. Under the California Rules of Court, the Supreme Court must decide whether or not to grant each Petition for Review no later than November 10, 2003. SEBA and its attorneys, Silver, Hadden & Silver, believe that this settlement was extremely beneficial to individuals SEBA is, and previously was, recognized to represent. With regard to pre-October 1, 1997 retirees, a significant increase in pension benefits retroactive to April 15, 1995 was provided without any member having to pay any retroactive contributions (which both the trial court and Court of Appeal held could be collected by the Retirement Association). Needless to say, active safety members who retire after October 1, 2003 will receive the enhanced 3% at age 50 pension formula under conditions where a significant ingredient of the return consideration extracted from them was the relinquishment of litigation claims that thus far have not been upheld.