Key points:

• Limited duration for post-retirement employment will mean up to 24 consecutive months, with potential extensions up to 48 consecutive months, or longer with CalPERS' approval.
• The 24-month rule will also apply to time served by active employees appointed to upgraded positions or classifications for purposes of reporting "temporary upgrade pay" to CalPERS.

"Extra Help" Retired Annuitants Can Perform Work of "Limited Duration"

Generally, CalPERS retirees must be "reinstated" from retirement if they work for a CalPERS contracting agency or the state. Reinstatement means retirement benefits are suspended, and CalPERS membership and contributions are required to resume with respect to the employment. An exception to reinstatement applies to retirees hired as "retired annuitants," if necessary to provide the employer with "extra help" either during an emergency or because the retiree has specialized skills needed in performing work of "limited duration."¹

Until now, CalPERS has not defined the term "limited duration" other than to advise that it is not "an indefinite period of time." Under the new regulation, CalPERS employers may initially appoint an extra help retired annuitant for up to 24 consecutive months. The employer's governing body can then extend the appointment twice, for up to 12 consecutive months each time, by certifying a resolution at a public meeting that explains why the extension is needed, why another employee cannot perform the retired annuitant's work, that a plan is in place to transition the work to another employee or retired annuitant, and the anticipated end date for the extension.

If another extension is needed after 48 consecutive months, the employer may ask CalPERS to grant an exemption for either a 12-month extension, or, if the retired annuitant works fewer than 120 hours per fiscal year, a continuous extension. An exemption request must include (1) a resolution by the employer's governing body certifying at a public meeting (may not be placed on consent calendar) why the extension is needed, why the work cannot be performed by another employee or retired annuitant, why the plan to transition the work to someone else was unsuccessful or cannot be implemented, either that the employer completed an unsuccessful recruitment to fill the position within the prior 12 months, or why a recruitment cannot be completed, and the anticipated end date of the appointment; and (2) the certifications described above for the prior extension(s).² The retired annuitant may not continue to serve in the appointment beyond 48 consecutive months until CalPERS approves the exemption.³

Exception for Collective Bargaining Agreements that Define "Limited Duration"

If a CalPERS retiree's post-retirement employment is covered by a collective bargaining agreement that defines "limited duration," that definition will apply instead of the regulatory definition, up to a maximum of 60 consecutive months.

New Definition Also Applies to "Temporary Upgrade Pay"

"Temporary upgrade pay" is a type of special compensation reportable to CalPERS for non-PEPRA members who are required by their employer to work in an upgraded position or classification of limited duration. Under the new regulation, "limited duration" for this purpose will mean 24 consecutive months, although additional 24-month periods can apply for the same upgraded position or classification, if regulatory conditions are met.

¹ "Extra help" retired annuitant appointments must comply with statutory limits on work hours, salary, and benefits; a prohibition against receipt of unemployment insurance compensation during the preceding 12 months arising from prior employment with the same employer; and a 180-day post-retirement waiting period, unless conditions for an exception are met.

² For appointment with the state, the Department of Human Resources (CalHR), the Trustees of the California State University (CSU Trustees), or the legislature, as applicable, must certify these items by memorandum (CalHR) or by resolution (CSU Trustees or the legislature).

³ CalPERS must grant or deny the exemption request within 60 days.