Oden v. Board of Administration of PERS

In Oden v. Board of Administration of PERS (1994) 23 Cal.App.4th 194, a class of retired public agency employees sued PERS and a class of public agency employers "disputing their exclusion of employer-paid salary-addition member contributions from reportable compensation and demanding increased retirement benefits based on compensation levels augmented by the amount of unreported contributions." ( Oden v. PERS, supra, 23 Cal.App.4th at pp. 197-198.) The trial court found the contributions were compensation under former section 20022, subdivision (a)(6), which listed "'employer "pick up" of member contributions which meets the requirements of Section 414(h)(2) of the Internal Revenue Code of the United States'" as compensation. ( Id. at p. 202, ) The appellate court reversed, however, focusing on the previously enacted subdivision (b)(6) of section 20022, which excluded from compensation "employers' payments which are to be credited as employee contributions for benefits provided by this system . . . ." The court acknowledged that employer-paid salary-addition payments "meet the literal definition of both an employer 'pick up' and an employer payment credited as an employee contribution" ( id. at p. 197), and further acknowledged section 2022 contained a "stark contradiction within its separately enacted parts." ( Id. at p. 202.) After analyzing the statutory context and legislative history to ascertain the legislative intent, the court concluded, "It appears the Legislature intended 'compensation' to coincide with an employee's stated salary without including employer-paid support of deferred compensation and benefit programs. Accordingly, we read subdivision (b)(6) to exclude employer-paid salary-addition employee contributions from 'compensation,' and subdivision (a)(6) to include employee-paid salary-deduction contributions in 'compensation.'" ( Id. at p. 203.)