Earlier this month, the CalPERS Pension and Health Benefits
Committee delayed action on a
proposed regulation to define “limited duration” employment
for retired annuitants and temporary upgrade pay appointments.
The decision to delay a vote on the proposed regulation came
after members of the Committee voiced concerns over a lack of
thorough stakeholder engagement, as well as creating new
employment restrictions as California continues to combat the
COVID-19 pandemic.
The majority of concerns for the new proposal centered around the
potential impacts on retired annuitants and their employers.
Retired annuitants are retirees who return to work with an
employer without reinstating their retirement benefits. Retirees
often have important skills that make them valuable in public
service positions, especially during times of emergency or when a
public agency employer is unable to fill a vacancy. Retired
annuitants have strict employment restrictions, including a
requirement that the employment is for a limited duration.
However, while the term “limited duration” has been in state
statute since the 1960s, it has never been strictly defined,
allowing employers the flexibility to address their communities’
changing needs.
The proposed regulation would define “limited duration” as 24
consecutive months, with an option of two 12-month extensions
upon approval from the CalPERS Board of Administration. During
the September 14th Committee meeting, CalPERS
staff linked the reasoning for defining limited duration to a
2019 audit that was largely concerned with temporary upgrade pay
and which found that “temporary” and “limited duration” were not
well-defined and created ambiguity.
Ultimately, the Committee decided to delay action on moving the
proposed regulation to the Board for approval. The proposal may
come back to the Committee in November when, if approved by the
Committee and the full CalPERS Board, the draft language would be
released for a 45-day public comment period. Until then, CalPERS
staff will meet with CalHR and other CalPERS employer agencies to
discuss impacts the proposal may have on employers’ abilities to
utilize retired annuitants. CSAC staff will continue to engage on
this issue and provide updates over the next few months.
