March 21, 2023
Circular Letter: 200-011-23
Topic: Announcements

To: All California State Agencies

Purpose

The purpose of this Circular Letter is to inform you of the impact of Executive Order N-1-23 (PDF) on California Public Employees’ Retirement System (CalPERS) retirees employed as retired annuitants with a California State agency or department with an assigned response and/or recovery role.

Background

On January 4, 2023, Governor Gavin Newsom issued Executive Order N-1-23 due to severe winter storms related to an atmospheric river event beginning on December 24, 2022. Under this new executive order, the governor included the suspension of some requirements of Government Code (Gov.) sections 21220, 21224(a), and 7522.56(b), (d), (f), and (g) of the Public Employees’ Retirement Law (PERL).

Work Hour Limitation Exceptions

The limitation that a retiree may only work 960 hours per fiscal year per Gov. Code sections 7522.56(d) and 21224(a) is suspended for retired annuitants employed with a California State agency or department with an assigned response and/or recovery role. Any hours worked by a retired annuitant to ensure adequate staffing during the state of emergency will not count toward the 960-hour limit for the fiscal year.

Wait Period Exceptions

Under this executive order, the 180-day break in service requirement under Gov. Code section 7522.56(f) is suspended for retired annuitants hired to ensure adequate staffing during the state of emergency. Gov. Code section 7522.56(g) regarding the 180-day wait period for retirees who accepted an incentive upon retirement is also suspended.

In addition, under the California Code of Regulations section 586.2(c), when the governor declares a state of emergency retirees are exempt from the 60-day bona fide separation in service requirement under Gov. Code section 21220.5. However, be aware that the prohibition under subdivision (a)(1) of CCR section 586.2 of any predetermined agreement between an employer and an impending retiree who has not attained normal retirement age, continues to remain in effect, consistent with federal law.

Timeline

The start date for the state of emergency was January 4, 2023. The suspension of the retired annuitant work hour limitation and wait period exceptions will remain in place until the state of emergency is lifted.

Continued Compliance

Agencies must continue to enroll, and report retired annuitants to CalPERS. The remaining working after retirement provisions in Gov. Code sections 7522.56(d) and 21224(a) will continue to apply:

• Compensation for the appointment shall not exceed the maximum monthly base salary paid to other employees performing comparable duties as listed on a publicly available pay schedule divided by 173.333 to equal an hourly rate.
• A retired annuitant shall not receive any benefit, incentive, compensation in lieu of benefits, or other form of compensation in addition to the hourly pay rate.

The executive order applies to work performed by a retired annuitant to ensure adequate staffing during the state of emergency. The director of the California Department of Human Resources (CalHR) must be notified of any individual employed pursuant to these waivers. Notification should be sent to CAStateofEmergency@calhr.ca.gov.

CalPERS will send communication to confirm receipt of notification from CalHR that a retiree’s post-retirement employment is covered under this order. CalPERS will continue to monitor post-retirement employment for all retired annuitants to ensure compliance with the PERL.

Questions

If you have any questions, contact the CalPERS Customer Contact Center at 888 CalPERS (or 888-225-7377 888-225-7377).

 

Renee Ostrander, Chief
Employer Account Management Division