What This
Lawsuit Is About
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What This Lawsuit Is About

Many CalPERS members buy "air time", military time or similar service credit, expecting to enhance their eventual retirement.

However, if they later get disabled and retire, CalPERS penalizes many of them by not giving them the full value of the additional service credit they bought.

Every CalPERS member who retires because of a disability is entitled by law to a specific disability pension. For example, a CalPERS member who takes an Industrial Disability Retirement (IDR) is automatically entitled to 50% of his or her highest "final compensation", regardless of how much service credit the member has. A CalPERS member taking a "regular disability retirement" gets a pension based on his or her total service credit, multiplied by a percentage of the member's highest "final compensation", with longer-term CalPERS members eligible for certain enhanced pensions.

CalPERS gives disabled members the right to choose a normal service retirement instead of a disability retirement if that will give them a larger pension. But even then, someone who bought extra service credit may end up with far less than the increased pension benefits he or she counted on.

Our lawsuit contends that if you bought air time, military time or similar service credit, you are entitled to your disability retirement pension plus the benefit of that service credit. CalPERS, however, often denies members these full benefits. Look at some hypothetical examples of CalPERS members who will lose some or all of their service credit investments.

When CalPERS denies those additional benefits, we allege that CalPERS

(1) Violates its Statutory Duties, including violating its duties to interpret and apply the legislative intent of the Public Employees’ Retirement Law;
(2) Breaches the Contract, including breach by failing to disclose risks of losing the investment;
(3) Should Allow Members to Rescind the Purchase Contract and Receive Restitution of the Benefits (i.e. repayment of lump sum and installments payments paid) because of CalPERS’ failure to disclose;
(4) Breaches its Fiduciary Duties, including its duty to fully inform;
(5) Denies Members Equal Protection of the law;
(6) Violates Due Process, including by failing to give reasonable notice of the seizure of Member's investments; (7) Should Allow Members Equitable Relief, including Rescission, and Accounting; and other rights;
(8) Gives rise to a Declaratory Relief action, including seeking declaratory relief that statutes are unconstitutional to the extent that they fail to give notice of CalPERS’ right of seizure;
(9) Should be subject to an Accounting of all the monies paid pursuant to these statutes;
(10) Impairs Members' Contract Rights in Violation of the Constitution;
(11) Should be Equitably Estopped from denying Members the benefit of their investments; and;
(12) Should be required to pay or perform other relief, including the payment of Attorneys’ Fees.

Please download a pdf and read the  Class Action Complaint.

Look at some hypothetical examples of CalPERS members who will lose some or all of their service credit investments.

If this has happened to you, the class action lawsuit filed against CalPERS may benefit you. Take the test to see if you are part of the potential class.

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