A California appeals court has ruled the San Francisco Retirement Board correctly excluded amounts paid for unused vacation and sick leave whencalculating “average final compensation” to determine retirement benefits. Under the retirement plans, average final compensation only included compensation earned during the period an employee provided credited service. Under San Francisco’s system, vacation and sick leave have no cash value while an employee is working—leave can only be exchanged for cash after retirement. Thus, those benefits had no cash value during the measuring period and were properly excluded from benefit determinations.
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