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By: @Aaron Avery

The California Public Employees’ Retirement System (CalPERS) has recently reinitiated its rulemaking for its Regulation Defining Limited Duration for Post-Retirement Appointments. The purpose of the rulemaking is to provide a definition of “limited duration” that includes restrictions on the duration for which CalPERS retired annuitants may work in retirement at a CalPERS-covered employer (this regulation is limited to the period of time constituting “limited duration” not the number of hours that may be worked each year or other requirements for working in retirement). CalPERS previously advanced its regulation in a 2022 rulemaking. (See CalPERS Adopts Revised Limited Duration Employment Regulations, Subject to 15-Day Comment Period). However, the regulatory process was halted prior to final adoption. Please check the CalPERS Regulatory Actions page, “Definition of Limited Duration Employment” tab, for more information on the 2022 rulemaking.

CalPERS has now reintroduced the process. At this time, the regulation is still in the “pre-rulemaking” informal phase. CalPERS is anticipated to commence formal rulemaking in September 2026. CalPERS has released the following documents for review by stakeholders:

1. Summary of Proposed Regulation Defining Limited Duration for Post-Retirement Appointments
2. Proposed Text: Definition of Limited Duration Employment

If you wish to provide feedback to CSDA’s advocacy team on the proposed regulation, please contact Aaron Avery at aarona@csda.net.

CalPERS has stated that key provisions include:

Limited Duration

• Retirees can work in a post-retirement appointment for two years with the same employer.
• Extension Process: After two years, the employer can extend the appointment for two additional years by approving one-year extensions for each year. The employer’s governing body must approve each extension and certify specific requirements are met at a public meeting before the retiree can continue working in that position under the approved extensions.
• Exemption Process: After four years (end of the second extension), the employer’s governing body can approve an exemption for a 120 hour per year continuous extension. Under the exemption, the retiree cannot work more than 120 hours per fiscal year in that position and cannot have another concurrent appointment with an approved exemption with the same employer. The employer’s governing body must certify specific requirements are met at a public meeting before the retiree can continue working in that position under the approved exemption.
• If the employer’s governing body does not approve an exemption, then that appointment ends and the retiree cannot work in another post-retirement position with that same employer unless the duties for the new post-retirement position are vastly different than the duties of the previous post-retirement position. For example, a retiree works as a bus driver for four years, that appointment ends and the same school district hires the retiree to work as a food service worker. Those positions have vastly different duties from each other and the food service position would be considered a new appointment with the employer.
• For retirees working in post-retirement appointments prior to the regulation effective date, the two-year duration begins on the regulation effective date.

Employer Responsibilities

• It is the employer’s responsibility to certify that all requirements are met for extensions and exemptions.
• The employer must keep all extension and exemption resolutions (memorandums for state appointments) and provide those resolutions to CalPERS upon request during any future investigations or audits.
• The employer must report the retiree’s name and anticipated end date for each extension and any exemptions to CalPERS. CalPERS will include the retiree in its annual report of approved extensions and exemptions, which will be available on the CalPERS website.
• For appointments with the state, the California Department of Human Resources (CalHR) certifies all requirements are met for extensions and exemptions by memorandum. CalHR may establish a process to delegate the certification to individual state agencies and may audit the state agency’s extension and exemption process to determine if abuses of the system occur. If necessary, CalHR may assume a state agency’s certification authority for retirees. CalHR, under their existing authority, may charge state agencies for this service.
• For appointments with the California State University, the Trustees of the California State University certify all requirements are met for extensions and exemptions by resolution at a public meeting.
• For appointments with the legislature, the Senate Committee on Rules or the Assembly Rules Committee, as applicable, certifies all requirements are met for extensions and exemptions by resolution at a public meeting.

Collective Bargaining Agreements

• If a collective bargaining agreement explicitly sets a different duration, up to five years, that duration applies instead of the standard two years. In the collective bargaining agreement, only that negotiated term will apply. The two one-year extensions and the 120-hour exemption will NOT apply. The maximum time allowed will be up to five years only.
• Employers must notify CalPERS and provide a copy of the agreement.
• Retirees whose duration is set by a collective bargaining agreement cannot hold another post-retirement appointment with the same employer.

Compliance and Penalties

Violations by retired persons or employers are subject to applicable penalties under Government Code section 21202, 21220, and 7522.56.

This is a summary, not the full extent of requirements, and was provided by CalPERS. Special districts should review the proposed regulations with counsel to determine compliance obligations and impacts.

CalPERS has also provided the following chart of key differences between the 2022 and 2026 drafts:

CalPERS has also provided stakeholders with a link to a Retired Annuitant Hiring Questionnaire: Retired Annuitant Hiring Questionnaire.

Separately, CalPERS is working on new health regions. Special districts may wish to participate in a webinar on August 6 at 11:00 AM to learn more about the proposed regions and provide any feedback.  

Stay tuned to Advocacy News and CSDA eNews for additional updates.