Court of Appeal Rules PEPRA Does Not Categorically Exclude Standby Pay from Pensionable Compensation

In a significant decision for California's public safety employees, the Court of Appeal in Ventura County Professional Firefighters’ Association v. Ventura County Employees’ Retirement Association (November 13, 2025) clarified that the Public Employees' Pension Reform Act (PEPRA) does not impose a blanket exclusion on standby pay when calculating "compensation earnable" under the County Employees Retirement Law (CERL). While the court ultimately upheld the exclusion of standby pay in this specific case based on the terms of the parties' Memorandum of Agreement (MOA), the ruling opens the door for unions to negotiate or arbitrate standby pay as part of normal working hours—making it potentially pensionable.

David E. Mastagni and Taylor Davies-Mahaffey filed the appeal on behalf of the Ventura County Professional Firefighters’ Association (VCPFA) and several individual members against the Ventura County Employees’ Retirement Association (VCERA). VCERA had excluded prescheduled standby pay from pension calculations, citing PEPRA's amendments to Government Code section 31461 and the California Supreme Court's decision in Alameda County Deputy Sheriff’s Assn. v. Alameda County Employees’ Retirement Assn. (2020). 

Under PEPRA, compensation earnable excludes "[p]ayments for additional services rendered outside of normal working hours" (§ 31461, subd. (b)(3)). VCPFA argued that prescheduled standby was assigned regularly as part of firefighters' duties, and therefore should count toward pensions because it formed part of their normal schedules.

The trial court sustained VCERA's demurrer without leave to amend, and the appellate court affirmed, finding that the MOA's language treated standby as discretionary and outside the base 40-hour workweek. Specifically, the MOA and a subsequent Side Letter described standby assignments as subject to the fire chief's discretion, not as fixed "normal working hours." As a result, the court concluded it fell under PEPRA's exclusion for services outside normal hours.

However, the real victory for public safety employees lies in the court's explicit rejection of the categorical ban asserted by VCERA's counsel. The opinion states: "We do not, as respondents urge, interpret section 31461 or Alameda as categorically prohibiting CERL pension programs from including standby or on-call pay when calculating compensation earnable. The 'underlying concept of compensation earnable' is 'to reflect pay for work ordinarily performed during the course of a year . . . .'" This means that if a labor agreement clearly defines standby as part of an employee's regular, non-discretionary schedule, it could qualify as pensionable.