CalPERS Delays Action on Proposal to Restrict Retired Annuitants
September 30, 2021
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.