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TAKE ACTION: CalPERS Decision Affecting Retired Annuitants

CSDA is asking for special districts to send comment letters to the CalPERS Board opposing the action before an October 23 deadline.

At CalPERS’ next board meeting November 16-18, 2020, the board will consider adopting the decision in a recent case (Appeal Regarding Post Retirement Employment of DUDLEY J. LANG) as setting a new precedent. Their position, which would expose retirees and employers to significant new financial liabilities, is summarized in their most recent staff analysis report.

A retired annuitant is someone who retires from a CalPERS employer and is collecting a pension. They may go back to work for a CalPERS employer under specific conditions, including working less hours, for less money, and without earning additional CalPERS benefits. They are an important resource for CalPERS employers, as they are a skilled workforce that can be tapped in times of need (for example, to complete unemployment claims for the Employment Development Department during this Covid-19 recession).

The adoption of this LANG precedent would provide future guidance in statue violation determinations. Unfortunately, in addition to providing guidance to employers and CalPERS on how to review wage and hour actions related to retired annuitants during a CalPERS audit, this precedent change would have the effect of removing the three-year statute of limitations of the audits and the potential penalties for violations.

CSDA is not contesting CalPERS’ determination of retired annuitant conditions of statute violations. However, this LANG decision could have far larger implications by allowing CalPERS to look back further than the current three-year statute of limitation to determine damages. It could also open the door to require the retiree, and the agency the retiree worked for, to pay back the over-payments the retiree received. Without the current three-year statute of limitations, a public agency could be exposed to significant financial liability should CalPERS determine that an employer improperly classified an employee as a retired annuitant.

 
Originally, this case was scheduled to go before the CalPERS Board to be adopted as precedential at its meeting in April of 2020. It came up again in September of 2020. At the request of CSDA and others, the item was pulled from the agenda due to challenges in soliciting comments during the early days of the COVID-19 pandemic. While challenges remain regarding soliciting comments during a pandemic, the CalPERS Board has decided to move forward with considering adoption of the controversial decision as precedential.

Action is needed to prevent CalPERS from increasing liability for special districts and other employers related to how many years the retirement system can reach back when it determines the employer misclassified a retired annuitant

CSDA is encouraging all special districts that utilize retired annuitants to consider submitting a comments letter to CalPERS by October 23, 2020.  We recommend urging the Board not to adopt the LANG decision as precedential. Sample letters are available at csda.net/take-action.