FROM: Barbara Hannah, Chief Counsel
SUBJECT: Update to Procedures for Disability Retirement and Formal Hearings
RECOMMENDATION:
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Recommend that the Board adopt and approve updates to the Procedures for Disability Retirement and Formal Hearings.
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BACKGROUND:
The SBCERA Board adopted the Procedures for Disability Retirement Application and Formal Hearings ("Procedures") to govern the disability retirement process. The Procedures were last amended on April 3, 2025. After review of the Procedures, staff recommends the following updates:
1. Rule 6 - Terminated for Cause or Resigned in Lieu of Termination
Rule 6 applies when a member is terminated for cause or resigns in lieu of termination. Recently, there have been several cases in which a member resigned, but the settlement agreement did not specify whether the resignation was in lieu of termination. In other instances, a member resigned before the disciplinary process was completed, likely to avoid a final determination of termination. In both situations, the record clearly established that the circumstances were tantamount to a dismissal, thereby precluding eligibility for a disability retirement. As currently written, Rule 6 specifically addresses resignation in lieu of clear termination or termination for cause. The recommended revision would close the gap by expressly including other circumstances that are equivalent to a dismissal, such as the following:
* Where there is a settlement agreement, but such agreement is silent as to termination and the record shows that the actions of the employer would have been tantamount to a dismissal.
* Where the Participating Employer serves a notice of intent to terminate.
* Where the employee requests a Skelly hearing or one that is equivalent but then resigns prior to the conclusion of the hearing.
* Where the employee is placed on administrative leave with the employer's intent to separate the employee for service.
2. Rule 11A ...
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