CalPERS Defers Decision on Retired Annuitant Precedent
November 20, 2020
At a meeting this week, CalPERS once again delayed taking action to declare new precedential rules for retired annuitants who return to work. As discussed in a previous article, if the Board declares the Lang decision precedential, it would make it easier for the retirement system to impose significant new liabilities for former retired annuitants and public agencies. For now, this is a win for retirees and public agencies, however, the matter could be taken up in the future.
Retirees collecting a pension may return to work, so long as they meet specific requirements, which include limits on the amount of pay they may receive and the number of hours worked in a 12-month period. In the 2012 case Appeal Regarding Post Retirement Employment of DUDLEY J. LANG, the retired Controller for the City of Industry worked over the 960-hour limit while collecting pension payments, which CalPERS then directed him to pay back since he should have been an active member of the system instead of a retired annuitant.
CalPERS attorneys have proposed using the case to set precedent for future cases against retirees because the administrative law judge laid out so clearly many of the rules that retired annuitants must meet and the criteria for evaluating the case. However, the case comes to two other, more worrying conclusions, without clear justification. The first is that retirees have the full burden of proving their post-retirement employment is legal if CalPERS accuses them of unlawful employment. The second is that a statute of limitations doesn’t apply and so CalPERS may recoup all pension money that was paid improperly to a retired annuitant, with no time limit.
The adoption of the Lang precedent would increase the financial liability of workers and employers who are trying to navigate complicated regulations. It would also open the door to challenging the employment of annuitants long-retired, or even passed, who would then have the full burden of proof but no records with which to do so to avoid drastic penalties.
CSAC is opposed to this measure and sent a letter to CalPERS outlining these concerns. Thank you to counties who joined us in this effort by submitting letters of their own.