December 18, 2024
Circular Letter: 200-035-24
Topic: Other

To: School Employers

Purpose

The purpose of this Circular Letter is to ensure compliant employment of retired annuitants (RA) by school employers under the Public Employees’ Retirement Law (PERL) and Public Employees’ Pension Reform Act of 2013 (PEPRA).

Requirements for Hiring Retired Annuitants in Schools

Under Government (Gov.) Code sections 7522.56 and 21229, RAs can be employed in temporary extra help appointments either during an emergency to prevent the stoppage of public business or because the retired person has specific skills needed to perform work of limited duration. Accordingly, these appointments cannot be indefinite, regardless of the nature of the RA’s position (e.g., substitute, seasonal, or temporary intermittent position) and regardless of the terms of the relevant employment agreement. The work performed should supplement regular staff efforts (e.g., elimination of backlog, special project work, or to help with work in excess of that which regular staff can complete) or be authorized "during an emergency to prevent stoppage of public business" such as in the event of floods, earthquakes, etc. RAs should not be considered permanent solutions to business needs. If we conduct a compliance review and find an RA working in any capacity, be prepared to present adequate documentation that the RA’s appointment complies with these limitations.

An RA’s appointment must also comply with additional requirements. For example, the rate of pay for the employment cannot be lower than the minimum nor exceed the maximum paid by the employer to other employees performing comparable duties, divided by 173.333 to equal an hourly rate, and the RA cannot receive any benefits, incentives, compensation in lieu of benefits, or other forms of compensation in addition to the hourly rate. Hiring RAs into positions designated as RA-specific may help employers ensure compliance with these requirements. Access the publications referenced further below for more details about these and other applicable requirements.

Process to Hire a Retired Annuitant

A school employer hiring an RA should ensure the appointment begins after retirement, in accordance with applicable waiting periods described in the publications referenced further below. Prior to retirement, the employee must separate from all CalPERS-covered employment, including from positions determined to be non-contributory. School employers can review non-contributory appointments by generating the "Overtime Appointment Identifier Report" Cognos report. If an employee fails to separate from employment, the employee will need to change their retirement date, which may result in an overpayment of benefits. An RA appointment cannot be a continuation of pre-retirement employment, either in the form of an RA-specific appointment or otherwise.

Reporting a Retired Annuitant

Positions that are normally excluded from membership are not excluded from post-retirement employment laws and limitations and must be reported.

For More Information

Refer to the Employment After Retirement (PUB 33) (PDF) and Public Agency & Schools Reference Guide (PDF, 2.9 MB) for further guidance regarding employing and reporting the post-retirement employment of an RA.

Questions

If you have questions, call our CalPERS Customer Contact Center at 888 CalPERS (or 888-225-7377888-225-7377). You may also email questions to our Post-Retirement Employment & Audits team at working_after_retirement@calpers.ca.gov.

 

Brad Hanson, Chief
Employer Account Management Division