Pasadena Police Officers Association v. City of Pasadena

In Pasadena Police Officers Association v. City of Pasadena (1983) 147 Cal.App.3d 695, the court considered the effect of a charter amendment that capped a formerly uncapped cost of living adjustment on city pensions. (Pasadena Police, at pp. 700-701.) With respect to current employees, the court found the amendment impaired a vested contractual right that was not offset by a comparable benefit (Ibid.) With respect to employees who had retired before any cost of living allowance went into effect, there was no vested right based on the contract in effect during their employment: "Since these members had completed all their years of service and retired before any COLA benefit was enacted, they never gave services with the reasonable expectation that their pensions would be adjusted for changes in the cost of living." (Id. at p. 706.) However, because these retirees had later given up other benefits to opt into a modified pension plan that included the supplemental cost of living allowance, they had provided the consideration giving rise to a new contractual right to the supplemental cost of living adjustment. (Id. at p. 707.)