Review of Key Court Decisions from 2025 Affecting Public Retirement Systems
Public pension systems navigated a wide array of court decisions in 2025 with issues including governance, benefit calculations, retiree reemployment, disability claims, and funding strategies. In collaboration with Williams & Jensen, NCPERS has summarized the key court cases impacting public retirement systems.
Notable highlights include a court upholding a plan retaining a portion of defined contribution contributions for application to unfunded liabilities (Cope v. LSU) and another court strengthening retirement boards' authority over personnel decisions under California's Proposition 162 (LACERA v. LA County). California's Sandhu v. CalPERS stressed proper classification of consultants to avoid unlawful reemployment and subsequent benefit repayment. Disability rulings clarified boards' discretion in weighing medical evidence and credibility (Moreland, Witteman, Long), while Vokac defined the term suspension as it relates to pensionable salary timing.
These cases bring attention to existing and nascent trends. Forfeiture cases reinforced consequences for job-related misconduct (Raftery, Brady). Funding flexibility increased as California's Supreme Court eased pension obligation bond issuance (City of San José). Speech protections emerged in Seals v. Wayne County, and benefit computation disputes highlighted the need for precise statutory interpretation of compensation and holidays (NVPERS).
Across these decisions, a few practical lessons for plan administrators stand out. Maintain meticulous records for independent contractor status, disability determinations, and salary calculations. Adhere strictly to statutes on contributions, forfeitures, and board authority. These decisions underscore the value of transparent governance, robust documentation, and proactive policy reviews to mitigate litigation risk and protect plan integrity.