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CalPERS Takes Vote on Adoption of Limited Duration Employment Regulation for Retired Persons

By Vanessa Gonzales posted 04-25-2022 02:48 PM

On Monday, April 18, 2022, the Pension and Health Benefits Committee of the CalPERS Board of Administration voted to move forward with adoption of a regulation governing limited duration employment of retired persons, for purposes of clarifying Government Code sections 7522.56, 21224, and 21229. A copy of the draft regulation may be found here.

Under the proposed regulation, a limited duration appointment will be defined as

  1. A position involving work that is substantially different from work that the retired person performs after retirement in another position for the same CalPERS-covered employer, or
  2. A position for a different CalPERS-covered employer from any previous CalPERS-covered employer the retired person performed work for after retirement.

A limited duration appointment will be limited to 24 consecutive months per appointment of a retired person, with up to two additional 12-month extensions, subject to specified conditions. CalPERS data indicates that 48 months covers approximately 75% of limited duration appointments. The proposed regulation also provides for indefinite additional exemptions beyond 48 months, in 12-month intervals, upon applications and specified conditions and showings made to the CalPERS Board of Administration, or for an unlimited amount of time when the appointment does not exceed 120 hours per fiscal year.

Upon its effective date, the new regulation will restart the clock on the initial 24-month duration for any pre-existing appointments. Employers must notify CalPERS of the appointment end date and any changes to that end date, as specified.

The proposed regulation would also define “limited duration” for temporary upgrade pay appointments as a limit of 24 consecutive months per appointment, as specified. An appointment must be immediately subsequent to a permanent appointment held by an individual for the same upgraded position/classification.  Based on CalPERS’ data, between July 2011 and September 2020, 99% of temporary upgrade pay appointments concluded within 24 months.

The draft language will now be subject to a 45-day public comment period in connection with the rulemaking process, after which the final version will be brought back before the Board of Administration for an additional vote, anticipated to take place in September 2022. The regulation is then anticipated to be submitted to the Office of Administrative Law for review and adoption. Discussion at the April 18 meeting indicated that there may be at least one likely non-substantive change to allow for exceptions / exemptions in certain circumstances after the expiration of the time periods above. Additional changes may trigger additional comment periods.

CSDA will provide additional updates as appropriate, and information concerning opportunities to comment on the proposed regulation.

Employers wishing to deepen their understanding of post-retirement employment issues may sign up for one of CalPERS’ upcoming Post-R
etirement Employment Webinars