California pension ruling limits how many vacation hours workers can count for retirement

The California Supreme Court ruled that public employees can only count vacation hours cashed out within a single calendar year toward their pension formulas, limiting retirees' ability to spread accrued time over multiple years. The decision centered on a case involving retired Ventura County Counsel Leroy Smith, who cashed out 240 hours of vacation time in a 12-month period but was denied pension credit for 40 hours exceeding his contract's annual limit.