The Los Angeles County Employees Retirement Association (LACERA), the nation’s largest county pension system with a portfolio exceeding $72 billion and more than 185,000 members, operates under the County Employees Retirement Law of 1937 (CERL; Gov. Code, § 31450 et seq.), which Los Angeles County adopted by ordinance shortly after CERL’s enactment. LACERA has more than 400 employees of its own, whose salaries and benefits make up the large majority of its administrative costs, all paid from the fund’s investment earnings rather than the County’s general fund. Since 1978, LACERA has hired its own fund-management staff under CERL provisions authorizing retirement boards to “appoint” necessary personnel, and after a 1996 legal opinion concluded the County had no authority to override LACERA’s classification and salary decisions, the County did not dispute that position for over two decades, removing LACERA employees from County collective bargaining units in the process.

That practice broke down in 2018, when a new County Counsel opinion disavowed the County’s prior position, concluding LACERA lacked constitutional or statutory authority to dictate classification and compensation decisions binding on the County. Acting on that new view, the County’s Board of Supervisors refused several of LACERA’s 2018 and, again, 2021 requests to create new job classifications or raise salaries for information technology, management, and legal positions, approving some requests only at reduced salary levels or denying them outright based on internal alignment with comparable County classifications.

In October 2021, LACERA sought declaratory relief and a writ of mandate compelling the County to implement its classification and salary decisions. The Los Angeles County Superior Court denied relief, following the Court of Appeal’s earlier decision in Westly v. Board of Administration (2003) 105 Cal.App.4th 1095, which had construed a retirement board’s constitutional “plenary authority” over “administration of the system” narrowly, as reaching only fund management and benefit delivery, not staff classification or compensation. The trial court likewise held that CERL’s requirement that retirement system staff “be included in the salary ordinance” adopted by the county did not impose a ministerial duty on the Board of Supervisors to simply adopt whatever salary LACERA proposed.

The Court of Appeal reversed, declining to follow Westly. It read the state constitution’s grant of “plenary authority” broadly enough to give retirement boards complete control over classification and compensation for their own staff, and read CERL’s salary-ordinance-inclusion language as imposing a mandatory duty on the County to adopt LACERA’s salary decisions. (Los Angeles County Employees Retirement Assn. v. County of Los Angeles (2024) 102 Cal.App.5th 1167.) The California Supreme Court granted review to resolve the resulting conflict with Westly.

In the case of Los Angeles County Employees Retirement Association v. County of Los Angeles, No. S286264 (Cal. Sup. Ct., August 2026) — the California Supreme Court reversed the judgment of the Court of Appeal, restoring the trial court’s judgment denying LACERA’s petition.

Writing for the majority, Justice Corrigan held that Westly’s narrower construction of California Constitution article XVI, section 17 (added by Proposition 162, the 1992 California Pension Protection Act) was correct. Reviewing the constitutional text as a whole, the Court explained that section 17’s grant of “plenary authority” over “administration of the system” is defined and limited by the eight subdivisions that follow it, all of which concern investment management, actuarial services, and the delivery of benefits to members and beneficiaries — not staff compensation. The Court found this reading confirmed by Proposition 162’s ballot materials, which framed the initiative almost entirely around preventing the state from “raiding” or “looting” pension fund assets to balance budgets, with no indication voters intended to shift classification and salary authority away from county governing bodies. The Legislative Analyst’s own impartial summary described the measure as giving retirement boards “complete authority for administration of the system’s assets,” language the Court found materially narrower than the sweeping personnel authority LACERA claimed.

The Court also held its interpretation was necessary to harmonize section 17 with the state constitution’s home rule provisions, which give county governing bodies, including charter counties like Los Angeles, authority to fix the number, compensation, and terms of employment for county employees. Because CERL itself defines retirement system staff as “county employees” whose compensation must be included in the county’s salary ordinance, and because no case had ever held otherwise, the Court found LACERA’s broader reading would work an unacknowledged partial repeal of the home rule provisions, a result courts should avoid absent a clear, irreconcilable conflict. The Court found this conclusion consistent with its own recent decision in Alameda County Deputy Sheriff’s Assn. v. Alameda County Employees’ Retirement Assn. (2020) 9 Cal.5th 1032, which had similarly read a retirement board’s “plenary authority” as bounded by the legislative design Congress set out in CERL rather than as license to depart from it.

Turning to the statutory question, the Court held Government Code section 31522.1 — which authorizes retirement boards to “appoint” needed staff hired from county civil service lists, while directing that such staff “shall be county employees” and “shall be included in the salary ordinance” the county adopts — does not impose a mandatory duty on county boards of supervisors to adopt whatever classification or salary a retirement board recommends. The Court found the statute’s plain text supported only a narrower, undisputed duty: that the county’s salary ordinance must budgetarily include retirement system staff positions at all, not that it must adopt the specific salary figures the retirement board proposes. Because setting compensation for civil service employees has long been treated as a discretionary, legislative act reserved to a county’s governing body, and because nothing in section 31522.1’s text or history clearly displaced that arrangement, the Court declined to read a ministerial duty into the statute’s use of the word “shall.” The Court did not foreclose all judicial recourse, however, noting county salary and classification decisions remain reviewable for abuse of discretion, and a writ of mandate may still issue if a county unreasonably delays or withholds action on a retirement board’s recommendations altogether.

Justice Groban’s dissent, joined by Justices Liu and Evans, argued the majority’s reading disregarded roughly four decades of consistent practice in which the County itself acknowledged LACERA’s authority over its own staff’s classification and compensation, including the County’s own 1996 acquiescence in outside counsel’s opinion to that effect. The majority responded to this history directly, concluding the record did not support characterizing that practice as a uniform, decades-long “shared understanding,” and that even a consistent past practice could not itself override the constitutional and statutory text the Court found controlling.