An August 17 California appeals court ruling rejected a public employee union's claim that its members had a right to "pension spiking," which the court described as "various stratagems and ploys to inflate their income and retirement benefits." Public employees often will pad their final salary total with vacation leave, bonuses and "special pay" categories to inflate the pension benefits they receive for the rest of their lives.

That decision was good news not just for pension-reform activists, but for the Jerry Brown administration and legislators from both parties who had supported a 2012 reform law meant to shave the state's pension obligations. As Justice James Richman noted in his ruling, spiking "has long drawn public ire and legislative chagrin."

But pension reformers got even better news, given the nature of the judge's reasoning. The court ruled that employees have a right to a "reasonable pension—not an immutable entitlement to the most optimal formula of calculating the pension." That simple logic undermines the core obstacle to far-reaching pension reform in California, and which has been adopted in several other states. It involves something known as the "California Rule.".....To Read More....