Opinion ID: 2614971
Heading Depth: 1
Heading Rank: 9

Heading: fixed ceiling limitations

Text: If an employer places a flat ceiling on the amount of leave it will cash out upon retirement, the Department's current practice is to account for this limitation by using FIFO (first in, first out) accounting principles to limit the number of days of accrued leave from the 2-year AFC period that would be included in calculating the AFC amount. The plaintiffs allege this current practice represents a change in policy, for they point to statements from a Department benefit supervisor that the Department prior to 1984 did not take into account ceiling limitations. The Department's benefit calculators began learning as early as 1976 that some employers had ceiling limitations. Apparently the Department had used FIFO with regard to other types of pension calculations, but at most only once prior to 1984 with respect to ceiling limitations. In the early 1980's, the Department's assistant director of operations (a position at least 2 levels of supervisors above benefit calculators) became aware of the ceiling limitations. In 1984, the Department developed forms for soliciting ceiling information from the employers so it could systematically account for ceiling limitations in calculating pensions. From 1984 on, the Department has taken ceiling limitations into account in calculating pensions. The Department does not contest that this change in practice served to reduce the size of PERS I pensions. [9] The parties' arguments are essentially the same as they presented with regard to the percentage limitations previously discussed in Issue 2. Moreover, the analysis we presented with respect to percentage limitations is equally applicable here for ceiling limitations. The facts support a conclusion that the Department changed its practices in 1984 regarding ceiling limitations. The effect of this change is to reduce pensions without providing any offsetting benefit for PERS I employees. As under Issue 2, the determinative question is whether the Department's pre-1984 practice of ignoring ceiling limitations was of a sufficient duration and nature to constitute a vested pension right. Given the 8-year period during which this practice occurred, the consistency of its application and its direct effect on pension levels, we conclude the Department violated the PERS I employees' pension rights.