Filed 1/4/24; Certified for Publication 1/18/24 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

VENTURA COUNTY 

EMPLOYEES’ RETIREMENT 

ASSOCIATION,

 Plaintiff and Respondent,

v.

CRIMINAL JUSTICE 

ATTORNEYS ASSOCIATION 

OF VENTURA COUNTY et 

al.,

 Defendants and Appellants.

2d Civil No. B325277

(Super. Ct. No. 

VENCI00546574)

(Santa Barbara County)

After our Supreme Court’s decision in Alameda County 

Deputy Sheriff’s Assn. v. Alameda County Employees’ Retirement 

Assn. (2020) 9 Cal.5th 1032 (Alameda), the Ventura County 

Employees’ Retirement Association (VCERA) adopted a 

resolution (the Resolution) excluding compensation for accrued, 

but unused, hours of annual leave exceeding employees’ calendar 

year allowance (“leave cashouts”) for purposes of calculating their 
2

retirement benefits. VCERA subsequently filed a lawsuit seeking

a judicial declaration that its Resolution was legal. The trial 

court ruled in favor of VCERA. The Criminal Justice Attorneys 

Association of Ventura and Ventura County Professional Peace 

Officers’ Association (collectively, Appellants) appeal the 

judgment.

1 We affirm. 

FACTUAL AND PROCEDURAL HISTORY

VCERA is a public retirement system established by 

Ventura County to provide retirement benefits to employees of 

the county and other local public entities, including Appellants. 

It is governed by the County Employees Retirement Law of 1937 

(CERL) (Gov. Code,2 § 31450 et seq.), the California Public 

Employees’ Pension Reform Act of 2013 (PEPRA) (§ 7522 et seq.), 

and article XVI, section 17 of the California Constitution. 

VCERA is administered by a board of retirement (the Board)

charged with implementing CERL’s provisions. (Alameda, supra, 

9 Cal.5th at p. 1052.) 

Retirement calculations under CERL and PEPRA

CERL governs the calculation of VCERA members’

retirement allowances based on a statutory formula comprised of 

an employee’s (1) age at retirement, (2) years of service, and (3) 

1 We granted the Retired Employees’ Association of 

Ventura County, Inc., Regina (Renee) Artman, Scott Barash, Lyn 

Krieger, Mark Lunn, Roberto R. Orellana, Tracey Frances Pirie, 

Marty Robinson, and Chris Stephens’s application to file an 

amicus curiae brief in support of Appellants. 

2 Further unspecified statutory references are to the 

Government Code.
3

final compensation. (§§ 31676.01-31676.19.) Only final 

compensation is relevant to this dispute. 

For “legacy” members (employed by the county or another 

public retirement system prior to PEPRA’s effective January 1, 

2013, date)

3, final compensation is calculated based on an 

employee’s “compensation earnable” during a representative 

period of their employment. (§§ 31462, 31462.1.) The

representative period of employment is either a 12- or 36-month

“final average compensation” period. Legacy members with a 

12-month final average compensation period are Tier 1 members 

(§ 31462.1, subd. (a)). Legacy members with a 36-month final 

average compensation period are Tier 2 members (§ 31462, subd.

(a)). 

Section 31461 defines “compensation earnable” as “the 

average compensation as determined by the board, for the period 

under consideration upon the basis of the average number of days 

ordinarily worked by persons in the same grade or class of 

positions during the period, and at the same rate of pay.” 

(§ 31461, subd. (a).) In other words, it is the “ ‘average monthly 

pay . . . received by the retiring employee for the average number 

of days worked in a month by the other employees in the same job 

classification at the same base pay level.’ ” (Alameda, supra, 9 

Cal.5th at p. 1058.) 

When PEPRA became effective in January 2013, it revised 

laws governing pension plans and amended provisions of CERL. 

(Alameda, supra, 9 Cal.5th at pp. 1051-1052.) As relevant here, 

3 Final compensation for “new members” who joined the 

retirement system on or after January 1, 2013, are governed by 

different statutes (§§ 7522.32, 7522.34). The calculation of their 

retirement benefits is not at issue here. 
4

PEPRA amended section 31461 by adding subdivision (b), which 

excludes certain items from compensation earnable (hereafter 

referred to as “PEPRA exclusions”). (Assem. Bill No. 340 (2011-

2012 Reg. Sess.); Stats. 2012, ch. 296, § 28.) PEPRA now 

excludes from compensation earnable: “(2) Payments for unused 

vacation, annual leave, personal leave, sick leave, or 

compensatory time off, however denominated, whether paid in a 

lump sum or otherwise, in an amount that exceeds that which 

may be earned and payable in each 12-month period during the 

final average salary period, regardless of when reported or paid”; 

and “(4) Payments made at termination of employment, except 

those payments that do not exceed what is earned and payable in 

each 12-month period during the final average salary period, 

regardless of when reported or paid.” (§ 31461, subd. (b)(2) & 

(4).) 

Leave cashouts

A VCERA member may receive compensation for leave 

cashouts—accrued, but unused, hours of annual leave. A 

member’s terms of employment (e.g., a Memorandum of 

Agreement or the County Management Resolution) limit the 

number of hours a member may cash out in a calendar year. The 

calendar year’s allowance for leave cashouts varies depending on 

the employer and the employee’s seniority, date of hire, 

bargaining unit, and title. 

VCERA members may designate a 12- or 36-month final 

average compensation period that does not align with calendar 

years. Thus, the designated period may straddle two or four 

calendar years. For example, a Tier 1 member (those employees 

with a 12-month final average compensation period) may 

designate July 1 of year 1 to June 30 of year 2, or a Tier 2 
5

member (those employees with a 36-month final average 

compensation period) may designate July 1 of year 1 to June 30 

of year 4. 

For legacy members, a member’s compensation earnable 

includes compensation for leave cashouts during the 12- or 

36-month final average compensation period. Before Alameda, a 

member’s compensation earnable could include leave cashouts 

exceeding the member’s calendar year allowance for leave 

cashouts. To illustrate, if a member designated a final average 

compensation period that aligned with the calendar year(s), that 

member could not cash out more than their calendar year 

allowance for leave cashouts. But, if a member designated a final 

average compensation period that straddled multiple years (two 

years for Tier 1 members or four years for Tier 2 members), that 

member could cash out leave exceeding their calendar year 

allowance within the designated period. For instance, if the 

calendar year’s allowance for leave cashouts was 200 hours, a 

Tier 1 member could cash out 200 hours in year 1 and an 

additional 200 hours for year 2 for a total of 400 hours of leave 

redeemed during their final average compensation period. 

Alameda decision and the Resolution

In July 2020, our Supreme Court decided Alameda, supra, 

9 Cal.5th 1032. In Alameda, the plaintiffs (labor unions and 

other labor groups) challenged the amendments to CERL (i.e., the 

PEPRA exclusions under § 31461, subd. (b)) on the ground that

the plaintiffs possessed (1) contractual or equitable rights to 

receive pension benefits and (2) a constitutional right to receive 

pension benefits according to the law as it existed prior to

PEPRA. (Alameda, supra, 9 Cal.5th at pp. 1052-1053.) The court
6

upheld the PEPRA exclusions, concluding they did not violate 

contractual, equitable, or constitutional rights. (Id. at p. 1054.)

Thereafter, in October 2020, the Board adopted the

Resolution in response to Alameda. The Resolution stated that 

Alameda “determine[d] that CERL retirement boards may not 

include items in retirement allowance calculations, either 

compensation earnable under section 31461, as amended, or 

pensionable compensation under section 7522.34, that the 

applicable statutes require them to exclude. [¶] . . . [¶] The 

Board hereby determines that the Alameda Decision and other 

applicable law require it to change its determinations of certain 

pay codes for . . . compensation earnable.” 

Following adoption of the Resolution, VCERA excluded 

from compensation earnable payments for leave cashouts that 

exceeded a VCERA member’s calendar year allowance for leave 

cashouts. This exclusion applied to all retirement benefit 

payments made on or after August 31, 2020, (the date of the first 

issuance of retirement allowances after Alameda became final) to 

all VCERA members who retired on or after January 1, 2013, 

PEPRA’s effective date. Any overpayments made to employees

before the issuance of the Alameda decision were not recouped. 

The lawsuit

In its first cause of action, VCERA filed a lawsuit seeking

declaratory relief that it had the “legal authority” to take the 

actions set forth in the Resolution with respect to the PEPRA 

exclusions.

4

4 VCERA alleged a second cause of action for declaratory 

relief with respect to other provisions in the Resolution. This

second cause of action is not at issue in this action nor are the 

other provisions in the Resolution.
7

Leroy Smith, the former county counsel of Ventura County, 

filed a cross-complaint against VCERA for declaratory relief. 

Smith accrued 368.1 hours of annual leave per year, and his 

calendar year allowance for leave cashouts was 200 hours. As a 

Tier 1 member, Smith designated October 2019 to October 2020 

as his final average compensation period. He cashed out 240 

hours of leave: 40 hours in 2019 and 200 hours in 2020. VCERA 

only included compensation for the 200 hours of leave (his 

calendar year leave allowance) in determining Smith’s 

compensation earnable. Smith’s cross-complaint alleged a single 

cause of action for declaratory relief that VCERA had a legal duty 

to include cash payments for all 240 hours of leave in his 

compensation earnable for the purposes of calculating his 

retirement benefits. 

The County of Ventura (the County) filed a complaint in 

intervention in Smith’s cross-action. The County alleged one 

cause of action for declaratory relief, seeking a judicial 

declaration that “VCERA was not legally required to take the 

actions set forth in [the Resolution] . . . as it relates to annual 

leave cashouts that exceed what can be redeemed in a single 

calendar year.” 

The parties stipulated to resolving two issues by summary 

adjudication: (1) whether VCERA must exclude from 

compensation earnable annual leave cashouts exceeding the 

calendar year allowance for leave cashouts; and if so, (2) whether 

VCERA must exclude such leave cashouts from the calculation of 

retirement benefit payments to members who retired on or after 

January 1, 2013, the effective date of PEPRA’s amendments to 

CERL. 
8

The trial court granted summary adjudication in favor of 

VCERA. As to the first issue, the court found that for members 

with a 12-month final average compensation period (Tier 1 

members), “VCERA must exclude from the calculation of 

retirement benefit payments all compensation for leave cashouts 

that exceed the maximum amount of leave that was earnable and 

payable to the member in either calendar year that began or 

ended with the member’s 12-month measurement period.” 

Similarly, for members with a 36-month period (Tier 2 members), 

VCERA must exclude leave cashouts that exceed the maximum 

amount of leave earnable or payable in “any three-calendar-year

period that began or ended within the member’s 36-month 

measurement period.” 

As to the second issue, the trial court concluded that 

“VCERA may exclude such leave cashouts from the calculation of 

retirement benefit payments made on or after August 31, 2020, to 

VCERA members who retired on or after January 1, 2013.” 

DISCUSSION

Appellants contend the trial court erred in interpreting 

subdivision (b)(2) of section 31461 as applied to legacy 

members—employees who began their employment before 

PEPRA’s effective date. They argue that nothing in the statute’s 

plain text or legislative history required the Board to exclude 

leave cashouts exceeding employees’ calendar year allowance for 

leave cashouts from retirement benefit calculations. We conclude 

the trial court did not err.

The trial court’s interpretation of a statute is a question of 

law that we review de novo. (R & P Capital Resources, Inc. v. 

California State Lottery (1995) 31 Cal.App.4th 1033, 1036.) 

When interpreting a statute, “our fundamental task is to 
9

ascertain the Legislature’s intent to effectuate the purpose of the 

statute. [Citation.] We begin by examining the statutory 

language, giving terms their plain, ordinary meaning. If the 

language is ambiguous, we may look to extrinsic sources, 

including legislative history. We select the construction that 

comports most closely with the intent of the Legislature, with a 

view of promoting, rather than defeating, the general purpose of 

the statute, and avoiding an interpretation that would lead to 

absurd results.” (Fair Education Santa Barbara v. Santa

Barbara Unified School Dist. (2021) 72 Cal.App.5th 884, 898.)

In upholding the PEPRA exclusions, including section 

31461, subdivision (b)(2), our Supreme Court in Alameda 

examined the legislative intent behind PEPRA and its 

amendments to CERL. (Alameda, supra, 9 Cal.5th at pp. 1059-

1063.) The court observed that a bill analysis of the “pre-PEPRA 

version of Assembly Bill 340 explained that the purpose of these 

changes was to circumscribe CERL’s ‘very broad and general 

definition of “compensation earnable” ’ in order to reduce pension 

‘ “spik[ing],” ’ the manipulation of an employee’s pattern of work 

and pay to produce inflated compensation earnable during the 

final compensation period.” (Id. at p. 1061.) Moreover, the court 

noted that a review of the PEPRA exclusions “demonstrates that 

the Legislature sought to limit pension spiking by eliminating 

practices that, while arguably permitted under the broad 

language of the preexisting definition, are inconsistent with the 

statute’s overall concept of compensation earnable.” (Ibid.)

In analyzing subdivision (b)(2) and (4) of section 31461, 

Alameda observed that in counties where an employee is 

permitted to cash out leave time, “compensation for cashed out 

leave time becomes ‘compensation’ for purposes of section 31460 
10

in the year in which the cash value is received, which need not be 

the year in which the surrendered time was earned. This can 

lead to a distortion of the pension calculation when leave time 

awarded in a prior year is cashed out during the final 

compensation period, since this has the effect of adding 

remuneration for a prior year’s service to the compensation 

received for service during the final compensation period. A 

similar problem arises with payments made upon termination of 

employment, excluded by section 31461, subdivision (b)(4), 

because such payments are generally also compensation for the 

surrender of accrued leave time. By limiting the amount of ‘cash 

out’ and termination pay that can be included in compensation 

earnable to the value of leave time ‘earned and payable in each 

12-month period during the final average salary period’ [citation], 

the Legislature appears to have intended to prevent retiring 

employees from, in effect, including remuneration earned during 

prior years in the final compensation calculation.” (Alameda, 

supra, 9 Cal.5th at p. 1062.)

Alameda also noted that “[p]rior to PEPRA’s amendment, 

even in counties that limited the amount of leave time that could 

be cashed out in a calendar year, employees were able to double 

the amount of cashed out leave time received during a final 

compensation year by designating a final compensation year that 

straddles two calendar years . . . . By cashing out leave time in 

the second half of the prior calendar year and the first half of the 

subsequent calendar year, a retiring employee could double the 

amount of cashed out leave time received in the final 

compensation year. By limiting the inclusion of cashed out leave 

time to that ‘earned and payable’ in a ‘12-month period,’
11

subdivision (b)(2) and (4) prevent this practice.” (Alameda, supra, 

9 Cal.5th at pp. 1062-1063, italics added.) 

The Supreme Court clarified that although there was 

nothing “inherently abusive” about cashing out unused leave 

time outside the context of pension benefit calculations, “the 

pre-PEPRA definition of compensation earnable allowed an 

employee to considerably increase his or her pension benefit 

by . . . accumulating and cashing out a large quantity of unused 

leave time during the final compensation period. Because such 

enhancements are arguably inconsistent with the underlying 

concept of compensation earnable, which is intended to reflect 

pay for work ordinarily performed during the course of a year, 

these types of enhancement have been characterized as pension 

spiking.” (Alameda, supra, 9 Cal.5th at p. 1063.)

We follow the Supreme Court’s analysis of subdivision 

(b)(2) and (4) to conclude that amended section 31461 requires

exclusion of compensation for leave cashouts that exceed the one

(or three) calendar year’s limits for such cashouts for purposes of 

calculating legacy members’ retirement benefits. Designating a 

12- or 36-month final average compensation period that straddles 

multiple years to receive compensation for leave cashouts greater 

than the amount a member could receive in one or three calendar 

years, respectively, is the type of manipulation that the PEPRA 

exclusions sought to eradicate. (See Alameda, supra, 9 Cal.5th at 

pp. 1062-1063.) 

Appellants argue that our high court’s statements in 

Alameda regarding the legislative intent behind the PEPRA 

exclusions are dicta. But when the Supreme Court has reached 

well beyond the holding necessary to its opinion to express its 

broader view, as it did in Alameda, dicta from the high court 
12

should be followed. (Aviles-Rodriguez v. Los Angeles Community

College Dist. (2017) 14 Cal.App.5th 981, 990.) In our view, the 

high court’s statements in Alameda are persuasive. We thus 

reject Appellants’ argument that the Supreme Court’s analysis 

regarding section 31461, subdivision (b)(2) was dicta. 

Appellants contend the plain language of section 31461, 

subdivision (b) makes no mention of a “calendar year” and thus 

does not limit leave cashouts to what is earned and payable in a

“calendar year.” But in our view, subdivision (b)(2)’s limitation of 

leave cashouts “in an amount that exceeds that which may be 

earned and payable in each 12-month period during the final 

average salary period” is ambiguous. The final average 

compensation period may or may not be based on a calendar year. 

This ambiguity is highlighted where, as here, an employer places 

calendar year limitations on leave cashouts. Where there is 

ambiguity, we look to extrinsic sources such as legislative history. 

As the Alameda court observed, the legislative history reveals the 

PEPRA exclusions were intended to eliminate pension spiking by 

“excluding income designed to artificially inflate a pension 

benefit” and “limiting the inclusion of other types of 

compensation that were reasonably viewed as inconsistent with 

CERL’s general approach to pensionable compensation.” (See 

Alameda, supra, 9 Cal.5th at p. 1102.)

We must interpret section 31461, subdivision (b), to 

effectuate the Legislature’s intent of eliminating pension spiking. 

Thus, we interpret this statute to comport with the “underlying 

concept of compensation earnable, which is intended to reflect 

pay for work ordinarily performed during the course of a year.”

(Alameda, supra, 9 Cal.5th at p. 1063.) A member’s

compensation earnable during the final compensation period is 
13

meant to reflect the average pay the retiring employee received. 

(Id. at p. 1058.) And, an employee’s average pay during this

compensation period includes payment for leave cashouts that is

subject to annual limitations. Allowing members to avoid annual 

leave cashout limitations by designating a straddled final 

average compensation period does not comport with the concept 

of compensation earnable and is inconsistent with the legislative 

intent behind the PEPRA exclusions. 

While we appreciate the impact of the Board’s resolution on 

members’ retirement allowances, we nonetheless conclude the 

Board was required to comply with section 31461, subdivision (b) 

and Alameda and exclude compensation for unused leave 

exceeding their calendar year allowances. “The task of a county

retirement board is not to design the county’s pension plan but to 

implement the design enacted by the Legislature through CERL.” 

(Alameda, supra, 9 Cal.5th at pp. 1066-1067.) The Board had no 

authority here to “adopt or act on an interpretation [of CERL’s 

provisions] that is inconsistent with those provisions.” (Id. at p. 

1067.)5

5 Appellants do not challenge the trial court’s resolution of 

the second issue—whether VCERA can exclude from 

compensation earnable leave cashouts that exceed annual 

cashout limitations for members who retired on or after January 

1, 2013, PEPRA’s effective date. Accordingly, we will not address 

this issue or disturb the trial court’s ruling on this issue. (Golden 

Door Properties, LLC v. County of San Diego (2020) 50 

Cal.App.5th 467, 555 [issues not raised in appellant’s opening 

brief are deemed waived].) 
14

DISPOSITION

The judgment is affirmed. Respondent shall recover costs 

on appeal. 

BALTODANO, J.

We concur:

GILBERT, P. J.

CODY, J.
Colleen K. Sterne, Judge

Superior Court County of Santa Barbara

______________________________

Rains Lucia Stern St. Phalle & Silver, Jacob A. Kalinski 

and Brian P. Ross for Defendants and Appellants.

Norman Dowler and Michael G. Walker for Retired 

Employees’ Association of Ventura County, Inc., Regina Artman, 

Scott Barash, Lyn Krieger, Mark Lunn, Roberto R. Orellana, 

Tracey Frances Pirie, Marty Robinson and Chris Stephens as 

Amici Curiae on behalf of Defendants and Appellants. 

Nossaman, Ashley K. Dunning, Aalia Taufiq and Alexander 

Westerfield for Plaintiff and Respondent.
Filed 1/18/24

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

VENTURA COUNTY 

EMPLOYEES’ RETIREMENT 

ASSOCIATION,

 Plaintiff and Respondent,

v.

CRIMINAL JUSTICE 

ATTORNEYS ASSOCIATION 

OF VENTURA COUNTY et 

al.,

 Defendants and Appellants.

2d Civil No. B325277

(Super. Ct. No. 

VENCI00546574)

(Santa Barbara County)

ORDER CERTIFYING 

OPINION FOR 

PUBLICATION

[NO CHANGE IN 

JUDGMENT]

THE COURT:

The opinion in the above-entitled matter filed on January

4, 2024, was not certified for publication in the Official Reports. 

For good cause, it now appears that the opinion should be 

published in the Official Reports and it is so ordered.

There is no change in judgment.

____________________________________________________________

GILBERT, P. J. BALTODANO, J. CODY, J.