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On June 17, 2022, the formal public comment period opened for the proposed CalPERS regulation governing limited duration employment of retired persons, for purposes of clarifying Government Code sections 7522.56, 21224, and 21229. The comment period will close on August 1, 2022, as discussed in more detail below.

The comment period follows the April 18 vote by the Pension and Health Benefits Committee of the CalPERS Board of Administration to move forward with adoption of the proposed regulations.

• The Notice of Proposed Rulemaking can be viewed here.
• The Initial Statement of Reasons can be viewed here.
• The Text of the Proposed Regulation can be viewed here.

Under the proposed regulations, 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, or for an unlimited amount of time when the appointment does not exceed 120 hours per fiscal year, both upon applications and specified conditions and showings made to the CalPERS Board of Administration.

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 is now subject to a public comment period, commencing June 17, in connection with the rulemaking process.

Interested special districts may submit written comments relevant to the proposed regulatory action, which must be received by 11:59 p.m. on August 1, 2022.

Comments may be submitted by e-mail to Regulation_Coordinator@calpers.ca.gov  or mailed to:

Economic and fiscal impact statements related to the proposed regulations are available upon request from CalPERS. Additional information may be viewed at the Regulatory Actions page of the CalPERS website.

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

CSDA will provide additional updates as appropriate.