VENTURA COUNTY DEPUTY SHERIFFS' ASSOCIATION et al., Plaintiffs and Appellants, v. BOARD OF RETIREMENT OF VENTURA COUNTY EMPLOYEES' RETIREMENT ASSOCIATION, Defendant and Respondent; COUNTY OF VENTURA, Real Party in Interest.
A board of retirement is charged with calculating the base retirement allowances for former sheriffs' employees. Here we decide that the law does not require the Board to include within its calculation payments for bonuses and incentives earned by the employees during their service to the County. We agree with the result reached in Guelfi v. Marin County Employees' Retirement Assn. (1983) 145 Cal.App.3d 297, 193 Cal.Rptr. 343.
The Ventura County Deputy Sheriffs' Association, and three retirees, Richard P. Seery, Oscar Fuller and Bobby J. Taylor, appeal from the decision of the trial court denying their petition for writ of mandate in favor of respondent, the Board of Retirement for the Ventura County Employees' Retirement Association (Board). Because the statutory scheme requires calculation of retirement allowances based on the average compensation for days ordinarily worked by similar employees, instead of the actual amounts paid to individuals, we affirm the decision of the trial court denying the writ petition, except as regards deferred compensation.
The Sheriffs' Association and the County of Ventura (County) entered into a contract called the memorandum of agreement (MOA) in 1992. Included in the MOA were provisions entitling qualifying employees to receive cash payments from County funds for: 1. uniform maintenance; 2. pay in lieu of annual leave accrual; 3. bilingual premium pay; 4. educational incentive pay; 5. additional compensation for scheduled meal periods for designated employees; 6. holiday pay; 7. motorcycle bonus; and 8. field training officer bonus.
At the same time, the County passed a resolution entitling qualifying management and other unrepresented employees the right to receive cash payments from County funds for: 1. uniform maintenance; 2. pay in lieu of annual leave accrual; 3. longevity incentive; and 4. matching deferred compensation payments.
Seery, Fuller and Taylor were management employees. Most appellants are deputy sheriffs who fall under the MOA. Appellants asked the Board to include the cash payments at issue in the calculation of their base retirement benefits. The Board refused to do so. Appellants filed the instant writ petition seeking to compel the Board to recalculate retirement benefits for such retirees to include the payments at issue. The trial court denied the petition and this appeal ensued.
The facts are undisputed. The question before us is whether, in calculating the base compensation for retirement allowances, the Board must include the cash remuneration paid out of County funds for various items paid to individual employees during service. This is a question of law involving statutory interpretation which we review independently. (Guelfi v. Marin County Employees' Retirement Assn., supra, 145 Cal.App.3d at p. 301, 193 Cal.Rptr. 343.) Our paramount function in interpreting statutes is to determine the intent of the Legislature. (Delaney v. Superior Court (1990) 50 Cal.3d 785, 798, 268 Cal.Rptr. 753, 789 P.2d 934; Guelfi, supra, at p. 301, 193 Cal.Rptr. 343.) We consider all the language of the pertinent statutes according to its usual and ordinary import. (Delaney, supra, at p. 798, 268 Cal.Rptr. 753, 789 P.2d 934; Guelfi, supra, at p. 301, 193 Cal.Rptr. 343; Turner v. Board of Trustees (1976) 16 Cal.3d 818, 826–827, 129 Cal.Rptr. 443, 548 P.2d 1115.) When the words of a statute, as here, are clear and unambiguous, we do not resort to extrinsic sources such as legislative history. (Delaney, supra, at p. 800, 268 Cal.Rptr. 753, 789 P.2d 934; Guelfi, supra, at pp. 302–303, 307, 193 Cal.Rptr. 343.)
Payments received by such employees may be included in the base compensation for retirement allowances only if they meet the definitions of “compensation” and “compensation earnable” as defined in the County Employees Retirement Law of 1937, and the payments are actually received during the one year period selected by the employee as “final compensation.” (See Gov.Code, §§ 31450 et seq., esp. 31460, 31461, 31462.1.) 1
Before 1959, section 31460 defined compensation to include remuneration paid in cash, and the monetary value of board, lodging, fuel, laundry and other advantages furnished to a member as determined by the Board.
Today, section 31460 defines compensation, in pertinent part, as “the remuneration paid in cash out of county or district funds, plus any amount deducted from a member's wages for participation in a deferred compensation plan ․, but does not include the monetary value of board, lodging, fuel, laundry, or other advantages furnished to a member.” (Emphasis added.)
Section 31461 states: “ ‘Compensation earnable’ by a member means the average compensation as determined by the board [of Retirement], 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. The computation for any absence shall be based on the compensation of the position held by the member at the beginning of the absence. Compensation, as defined in Section 31460, that has been deferred shall be deemed ‘compensation earnable’ when earned, rather than when paid.” 2
Section 31462.1 defines “final compensation” to mean “the average annual compensation earnable by a member during any year elected by a member at or before the time he files an application for retirement, or, if he fails to elect, during the year immediately preceding his retirement.”
Uniform Maintenance Allowance
Appellants argue that the Legislature intended to exclude as base compensation for calculating retirement allowances only in-kind goods and services actually furnished by the County under section 31460. The Board maintains that this interpretation ignores the change in section 31460 which restricts remuneration for retirement allowances by “․ not [including] the monetary value of ․ laundry, or other advantages furnished to a member.” (Emphasis added.) Although appellants offer a thoughtful analysis, we agree with the Board, the trial court and the Court of Appeal in Guelfi that cash payments for the enumerated items and other advantages provided employees may be excluded by the Board in determining retirement allowances for appellants, except for deferred compensation.
In Guelfi the Court of Appeal considered substantially the same question before us today as it applied to retired police officers in Marin County. The officers sought recalculation of disability retirement allowances under the 1937 Act for uniform allowances, educational incentives and overtime. The First District Court of Appeal pointed out that “ ‘the uniform substitutes for personal attire which the employee would otherwise be forced to acquire with personal resources.’ ” (Guelfi v. Marin County Employees' Retirement Assn., supra, 145 Cal.App.3d at pp. 303–304, 193 Cal.Rptr. 343, quoting Rose v. City of Hayward (1981) 126 Cal.App.3d 926, 943, 179 Cal.Rptr. 287, which concerned nearly identical language under the Public Employees' Retirement Law; Gov.Code, § 20000 et seq.)
In Rose, the court explained that providing cash for clothes differs from providing cash for ammunition. Ammunition is required for police officers to perform their particular duties; it primarily benefits the employer. Uniforms merely substitute for other clothes the employee would need to purchase anyway. The Guelfi court concluded that the cash paid to public safety members as an annual uniform allowance, as here, constitutes the monetary value of “ ‘other advantages furnished to a member,’ and hence [is] properly excludable from the computation of retirement benefits.” (Guelfi v. Marin County Employees' Retirement Assn., supra, 145 Cal.App.3d at pp. 303–304, 193 Cal.Rptr. 343.) We adopt the view of the Guelfi court.
Appellants contend that the Legislature merely sought to simplify the calculations of individual retirement benefits by excluding the monetary value of various benefits in its 1959 amendment to section 31460. If this were so, it could have dispensed with the limiting language it has included. It could have more simply defined remuneration for retirement benefits as all amounts paid in cash out of county funds. Instead, the Legislature restricted from base compensation for retirement benefits the monetary value of both enumerated items and other advantages furnished to members. Because uniform allowances constitute such an advantage, they are not “compensation” within the meaning of section 31460. We need not consider the further question of whether such remuneration also constitutes “compensation earnable” under section 31461.
Educational Incentives, Bilingual Premium Pay and Field Training Bonus
As Guelfi explained, educational incentive pay is not an “advantage” furnished a member of the retirement system. The education and training furnished sheriffs' employees is primarily for the benefit of the County; it is of marginal benefit to appellants. Appellants undergo such education and training because of their specific employment duties. For this reason, such payment is “compensation” under section 31460. (Guelfi v. Marin County Employees' Retirement Assn., supra, 145 Cal.App.3d at p. 304, 193 Cal.Rptr. 343.) Such payment may not be included for calculation of base retirement benefits, however, unless it is both “compensation earnable” and constitutes “final compensation” within the meaning of sections 31461 and 31462.1.
Under section 31462.1, the “final compensation” which is used to determine the retirement allowance is the “average annual compensation earnable by a member during any year elected․” Therefore, “final compensation” is not all the cash actually earned or received during the year elected by the employee. As pointed out previously, “compensation earnable” is “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.)
The term “compensation earnable” connotes the average, ordinary pay of workers in a class; not the actual pay of any individual. The Board is generally vested with authority under section 31461, to determine the elements of compensation which constitute “compensation earnable” for purposes of calculating an employee's “final compensation” and the proper retirement benefit. (Guelfi v. Marin County Employees' Retirement Assn., supra, 145 Cal.App.3d at p. 305, 193 Cal.Rptr. 343.)
Under the educational incentive program, persons similarly graded or classified are not compensated at the same rate of pay. Not all persons within the same grade or class of positions qualify for educational incentive pay, and those who do qualify hold differing certificates and receive differing incentive amounts. The words of section 31461 do not contemplate inclusion of differing compensation amounts for education incentives as “compensation earnable” for retirement purposes. (Guelfi v. Marin County Employees' Retirement Assn., supra, 145 Cal.App.3d at p. 305, 193 Cal.Rptr. 343.) The Board has discretion to decline to include such amounts in its calculation of the base retirement allowance.
Similarly, compensation earnable need not include field training bonuses or bilingual premium pay under section 31461. Here, field training bonuses are paid only to those deputy sheriffs who provide such training and only for the limited period they do so. Most employees in the classifications at issue here do not receive bilingual pay premiums. The Board may not skew the average compensation earnable for retirement benefits by inclusion of such premium pay.
Annual Leave Redemption and the Longevity Incentive
Annual leave redemption and the longevity incentive are compensation under section 31460. (See Guelfi v. Marin County Employees' Retirement Assn., supra, 145 Cal.App.3d at pp. 306–307, 193 Cal.Rptr. 343.) But, like the overtime pay at issue in Guelfi, annual leave and longevity incentive may be excluded from the compensation base for retirement benefits. (Id. at pp. 306–307, 193 Cal.Rptr. 343.) This is because “compensation earnable” is defined to be the average number of days ordinarily worked by others of the same rank and at the same rate of pay. (§ 31461.)
The annual leave redemption an employee may take is dependent on the amount of leave actually used, the amount of annual leave accrued, the number of years of service and the use of the longevity incentive to which a particular employee may be entitled. By its nature, the longevity incentive is not an ordinary emolument of the average worker and its inclusion would alter the average compensation of a worker in a class.
Deferred Compensation—401(k) Match
Employees of a county which has a deferred compensation plan may authorize deductions to be made from their wages for the purpose of participating in the plan (section 53213; deferred compensation is also known as a 401(k) plan). Deferred compensation is “compensation” under section 31460, and, pursuant to section 31461, payments therefor shall be deemed “compensation earnable” when earned. Although employees need not participate in the plan and they may contribute substantially differing amounts at different times, the Board is bound to include deferred compensation for the purposes of calculating base retirement benefits due to the express words of sections 31460 and 31461.
Eligible, contributing County employees may also receive employer “matching funds” under the deferred compensation plan of the County. These matching funds meet the definition of compensation in section 31460 because they constitute “remuneration paid in cash,” even though such payment is also deferred. These funds must be paid “plus any amount deducted from a member's wages for participation in a deferred compensation plan․” Accordingly, they must be included in the base retirement calculation as well, and are to be treated as earned at the same time as the deferred compensation itself. (§§ 31460, 31461.)
Meal Period and Holiday Pay
Although meal period pay may be considered compensation, it is not compensation earnable. Meal period pay is provided only to those assigned either as sheriff's pilots, crew chiefs in the public safety aviation unit or as members of patrol divisions. Such assignments change. In a recent year, for example, slightly over half of the deputy sheriffs received this benefit for some period of time during the year.
Holiday pay is compensation, but it is only paid to those employees working a four-day on, two-day off schedule in the instant case. Only some of the employees in any particular classification are on the instant schedule at any given time, and whether an employee's schedule actually results in receipt of holiday pay is dependent on specific assignments. Certain employees in certain assignments are more likely to receive such pay because of their assignment. In the instant case, the Board had the discretion to exclude such pay from its determinations of final compensation of its members. (Cf. County of Marin Assn. of Firefighters v. Marin County Employees Retirement Assn. (1994) 30 Cal.App.4th 1638, 1643–1646, 36 Cal.Rptr.2d 736, in which all safety members received pay for holidays and the Marin board determined that such pay must be included as part of final compensation. The Court of Appeal agreed, under the particular circumstances of that case.)
The motorcycle bonus is compensation, but it is not compensation earnable. The motorcycle bonus is available only to those deputy sheriffs who are assigned to motorcycle duties. Because it is a bonus available only to some deputies performing a special duty, it falls outside the definition of compensation earnable.
The statutory scheme which permits the Board to determine retirement allowances for employees generally evinces the intent to provide allowances which are not dependent on individual circumstances. The words of section 31461 require the Board to base retirement allowances on the average compensation of a class as determined by considering the average number of days ordinarily worked by people in that class at the same rate of pay. It is not based on the total compensation actually earned by a particular member. Although one may argue the normative merits of such a system, we are not free to alter it. The legislative intent would be thwarted if the Board were to include particular payments made to individuals during service for their special assignments or skills, bonuses, individual achievements or variable choices.
The judgment is affirmed except as to deferred compensation. We remand to the Board for calculation of retirement benefits in accord with this opinion. Costs to respondents.
1. All statutory references are to the Government Code unless otherwise stated.
2. Section 31461, amended during the pendency of this appeal, provides in part that “[c]ompensation, as defined in Section 31460, that has been deferred shall be deemed ‘compensation earnable’ when earned, rather than when paid.” This amendment incorporates language from former section 31461, subdivision (b) that applied only to Los Angeles County. (Stats.1995 ch. 558, (S.B.225), § 1.) This amendment does not affect our decision.
GILBERT, Associate Justice.
STEVEN J. STONE, P.J., and YEGAN, J., concur.