Source: https://law.justia.com/cases/california/supreme-court/2d/29/848.html
Timestamp: 2019-04-25 21:58:34+00:00

Document:
HENRY A. KERN, Petitioner, v. CITY OF LONG BEACH et al., Respondents.
Joseph A. Ball and Kenneth Sperry for Petitioner.
In this proceeding petitioner seeks a writ of mandate compelling respondent city to pay him a pension under a provision of the city charter which was repealed shortly before he would have been entitled to retire.
The question to be determined is whether petitioner acquired a vested right to a pension which the city could not abrogate by repealing the charter provisions without impairing its obligation of contract.
In some states pensions for government employees are treated as gratuities or bounties which can be withdrawn at any time. (See 54 A.L.R. 943; 98 A.L.R. 505; 112 A.L.R. 1009; 137 A.L.R. 249.) In California, however, section 31 of artivle IV of the Constitution forbids gifts of public money to an individual, and this prohibition may have influenced our courts to hold that a pension right constitutes something more than a mere gratuity.
It is contended by the city, however, that petitioner did not acquire any vested right to a pension because he did not complete the prescribed period of service prior to the time the pension provisions were repealed. It is therefore necessary to ascertain whether any rights vested prior to the repeal and, if so, the nature and extent of those vested rights.
The quoted statements are not in conflict with language appearing in some cases to the general effect that public employment is not held by contract. (See Miller v. Kister, 68 Cal. 142, 144 [8 P. 813]; Risley v. Board of Civil Service [29 Cal. 2d 853] Commrs., 60 Cal. App. 2d 32, 36 [140 P.2d 167]; Nider v. City Commission, 36 Cal. App. 2d 14, 30 [97 P.2d 293]; Mansfield v. Chambers, 26 Cal. App. 499, 504 [147 P. 595].) These cases involve the right to remain in an office or employment, or to the continuation of civil service status.  Although there may be no right to tenure, public employment gives rise to certain obligations which are protected by the contract clause of the Constitution, including the right to the payment of salary which has been earned.  Since a pension right is "an integral portion of contemplated compensation" (Dryden v. Board of Pension Commrs., 6 Cal.2d at p. 579 [59 P.2d 104]), it cannot be destroyed, once it has vested, without impairing a contractual obligation. Thus the courts of this state have refused to hold, in the absence of special provision, that public employment establishes tenure rights, but have uniformly held that pension laws such as the Long Beach Charter provision establish contractual rights. It was the failure to recognize this distinction that led to an erroneous criticism of the Dryden case in Risley v. Board of Civil Service Commrs., 60 Cal. App. 2d 32, 39-40 [140 P.2d 167].  The fact that a pension right is vested will not, of course, prevent its loss upon the occurrence of a condition subsequent such as lawful termination of employment before completion of the period of service designated in the pension plan.
The rule permitting modification of pensions is a necessary one since pension systems must be kept flexible to permit adjustments in accord with changing conditions and at the same [29 Cal. 2d 855] time maintain the integrity of the system and carry out its beneficent policy. The permissible scope of changes in the provisions need not be considered here, because the respondent city, with a minor exception, has repealed all pension provisions.
 Thus it appears, when the cases are considered together, that an employee may acquire a vested contractual right to a pension but that this right is not rigidly fixed by the specific terms of the legislation in effect during any particular period in which he serves. The statutory language is subject to the implied qualification that the governing body may make modifications and changes in the system. The employee does not have a right to any fixed or definite benefits, but only to a substantial or reasonable pension. There is no inconsistency therefore in holding that he has a vested right to a pension but that the amount, terms and conditions of the benefits may be altered.
Let a peremptory writ of mandate issue directing respondents to grant petitioner's application for a retirement pension, as provided by section 187, subdivision 2, of the city charter before the repeal.

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