Protect Our Benefits v. City & County of San Francisco

Since 1996, retired employees of the City and County of San Francisco (the City) have been eligible to receive a supplemental cost of living allowance (supplemental COLA) as part of their pension benefits when the retirement fund’s earnings from the previous year exceeded projected earnings. On November 8, 2011, City voters passed Proposition C, an initiative measure that, among other things, amended the charter of the City and County of San Francisco to condition the payment of the supplemental COLA on the retirement fund being “fully funded” based on the market value of the assets for the previous year.

Protect Our Benefits (POB), a political action committee representing the interests of retired City employees, appeals from a superior court order denying its petition for writ of mandate seeking to invalidate this amendment as an impairment of a vested contractual pension right under the contract clauses of the federal and state Constitutions. With respect to current City employees and employees who retired after the supplemental COLA first went into effect on November 6, 1996, we agree the full funding requirement cannot stand. With respect to employees who retired…