California pension ruling limits how many vacation hours workers can count for retirement

A new California Supreme Court ruling limits how much vacation time government workers can convert into larger pensions. Per CalMatters, the court has decided that employees can only count vacation hours toward retirement if they cash them out within a single calendar year—not across a rolling twelve-month period. The decision applies to county workers, not state employees in CalPERS or CalSTRS. Some public employees end their careers with months of unused vacation, potentially boosting their retirement pensions by hundreds of dollars a month if cashed out strategically. The case centered on retired Ventura County counsel Leroy Smith, who wanted credit for extra vacation hours he cashed out over multiple calendar years. The Supreme Court sided with the interpretation that Governor Brown's 2013 pension reform law intended to restrict cashouts to single calendar years. The ruling prevents workers from timing their benefits to circumvent annual limits and protects county pension systems from costly benefit revisions.

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