Cal Fire Local 2881 v. Cal. Pub. Employees' Ret. Sys., 244 Cal. Rptr. 3d 149

The issue concerns whether the statutory option to purchase additional retirement service (ARS) credits under Gov. Code §20909 created an implied vested contractual right protected by the California Constitution's Contracts Clause.
The court compared ARS purchases to traditional pension/retirement benefits, which prior California cases have treated as capable of creating implied-in-fact unilateral contracts that vest when employees perform service or defer compensation.
ARS purchasers were already vested in basic pension benefits (served at least five years) and had to pay the full estimated actuarial cost to obtain additional credits under §§20909 and 21052.
The majority held (and this concurrence expands) that the ARS purchase option was not offered in exchange for future service but in exchange for payment; acceptance required an affirmative election and payment, not mere continued employment.
Because no implied unilateral contract arose from mere continued employment, the Contracts Clause did not bar modification or revocation of the ARS purchase option.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the ARS purchase option vested as an implied-in-fact unilateral contract by continued employment	ARS was part of retirement benefits and thus vested by implication like pensions	ARS was purchasable for full price and required affirmative election; not an exchange for service	No; no implied unilateral contract arose from continued employment
Whether the Contracts Clause prevented alteration/revocation of the ARS option	Contract Clause protects any vested right to ARS arising from employment	Because ARS did not vest as a contractual right, Contracts Clause does not bar statutory change	No; Contracts Clause not implicated because no vested contractual right existed

Betts v. Board of Administration, 21 Cal.3d 859 (1978) (recognized implied vesting of pension rights)
Kern v. City of Long Beach, 29 Cal.2d 848 (1947) (pension vesting and implied contract principles)
Brant v. California Dairies, Inc., 4 Cal.2d 128 (1935) (objective intent governs contract formation)
Foley v. Interactive Data Corp., 47 Cal.3d 654 (1988) (outward manifestations determine implied contractual terms)
McGrath v. Rhode Island Retirement Bd., 88 F.3d 12 (1st Cir. 1996) (analysis of implied pension contract formation)
Moro v. State, 357 Or. 167 (2015) (statutory framework vs employer offer distinction in public retirement contracts)