FROM: Debby Cherney, Chief Executive Officer
Barbara Hannah, Chief Counsel
SUBJECT: Implementation of the exclusion of Night Standby (D06).
RECOMMENDATION:
title
Approve and adopt [Proposed] SBCERA Resolution No. 2026-3 regarding the implementation of exclusion of Night Standby (D06).
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BACKGROUND:
The SBCERA Board of Retirement (Board) is required by Government Code section 31461 and 31542, as well as Board Benefits Policy No. 026 (Compensation Earnable and Pensionable Compensation) to determine what items of a member compensation are included or excluded in employee compensation upon which appropriate contribution rates should be applied and upon which retirement benefits are calculated.
This Board agenda item is a companion item to the Hearing Officer’s Final Proposed Findings and Recommendation in the matter of Alameda Administrative Appeal of Clinical Laboratory Scientists (formerly known as Professional Lab Technicians), which is on the Board’s agenda for consideration on March 5, 2026. In that item, the Hearing Officer recommended that the Night standby paycode D06 does not constitute compensation earnable and should be excluded from pension calculations. A copy of the proposed findings is attached hereto as Exhibit B.
The SBCERA Board previously adopted Resolution 2024-4, which excluded pay code D06 from compensation earnable, but at its meeting on December 5, 2024, directed staff to refer the factual and legal questions regarding implementation of the exclusion of Night Standby D06 pay to a hearing officer to review additional documentation and oral testimony of the affected members. The Board instructed staff to hold on any action to adjust existing monthly benefit payments of retirees with the D06 paycode incorporated into their payment calculation.
If the Board adopts the Hearing Officer’s recommendations in the companion Board agenda item, the Board must now consider how to implement that recommendation. Staff recommends adopting the [Proposed] SBCERA Resolution No. 2026-3 to implement the Board’s continued exclusion of D06, which will be as follows:
1. Retirees - Ronald Sanchez, Sharon Ochoa, and Lisa Chesonis
a. Exclude Night Standby (D06) from their monthly benefit, prospectively, beginning with the monthly benefit of March 2026. This group of retirees would not be required to repay any overpaid benefits received during the period between January 1, 2013 and February 2026.
b. To the extent contributions paid on D06 exceed overpaid benefits, then staff shall make corrective distributions.
c. No recoupment shall be made directly from the retirees, and to the extent of any overpaid benefits prior to March 2026, authorize the overpaid benefits to be included as part of the UAAL through self-correction.
2. Existing Retirees (D06 - Not Included as part of their Final Average Salary)
a. Provide notice to the retirees regarding the continued exclusion of Night Standby (D06) from compensation earnable and that it will not be included in their final average salary for purposes of calculating their monthly benefit. As of the date of the Board meeting, the retirees in this group would have received notice of the Board meeting and that D06 would continue to be excluded from compensation earnable; thus, not being included in their benefit payment.
b. To the extent contributions paid on D06 exceed overpaid benefits, if any, then staff shall make corrective distributions of those contribution amounts that were paid subsequent to January 1, 2013 to the date of retirement.
3. Active Employee (D06 reported to SBCERA)
a. Provide notice to the active employees regarding the continued exclusion of Night Standby (D06) from compensation earnable and that it will not be included in their final average salary for purposes of calculating their monthly benefit.
b. To the extent contributions were reported for D06, staff shall make corrective distributions paid subsequent to January 1, 2013.
Staff has consulted with tax counsel, and the recommended implementation is in compliance with available correction methods.
BUDGET IMPACT:
None.
STRATEGIC PLANNING GOAL/OBJECTIVE:
Prudent Fiscal Management
STAFF CONTACT:
Barbara Hannah
Debby Cherney
Amy McInerny
ATTACHMENTS:
Exhibit A: SBCERA Resolution No. 2026-3 (Implementation of exclusion of night standby (D06))
Exhibit B: Hearing Officer’s Final Proposed Findings and Recommendation in the matter of Alameda Administrative Appeal of Clinical Laboratory Scientists (formerly known as Professional Lab Technicians)