On May 20, 2024, the Board of Retirement voted to adopt a 7.9% interest rate on underpaid benefits stemming from Alameda-related corrections. Members who retired on or after July 30, 2020 who had certain estimated exclusions applied at the time of their initial retirement calculation may be affected.

After the Alameda court decision in July 2020, VCERA staff used the information available to recalculate benefits and began excluding certain items from Final Average Compensation (FAC) calculations to comply with the decision. These exclusions that occurred early in the process after July 2020 were best estimates at that time. Since then, more precise numbers have been calculated by the employers and by VCERA, and some of these exclusions have now been reversed. Such exclusions included 1) the removal of all flex credits for VRSD members, which was later determined to be improper because VRSD had reported only the cashable amount of flex credits, and 2) the removal of situational pay codes in full where it was later determined that only a portion of hours reported with the pay code should be removed. As a result of reversing these exclusions, VCERA has, in some cases, identified a new higher FAC period and has recalculated benefits. The recalculations resulted in underpaid benefits owed to the affected retired members. These missed benefit payments will be treated as back-pay.

Following the board’s May 2024 approval, an interest rate of 7.9% will be applied to these back-payments. This is consistent with a March 2023 board decision to apply the same interest rate to other Alameda corrections. The 7.9% interest rate was selected based on average long-term earnings, and also mirrored the quarterly performance report as of December 31, 2022.

To learn more, visit our Alameda-related updates page or view our Alameda Decision FAQs & Glossary. You may also find additional information in this VCERA staff letter requesting the interest rate adoption.