The Public Employees’ Retirement Law (PERL) generally prohibits retired CalPERS members from working for a CalPERS contracting agency without being reinstated into active membership, unless the employment falls under one of a few narrowly drawn exceptions. The employment must also follow various technical restrictions, such as not working more than 960 hours in a fiscal year.
Under existing law, if a retired annuitant’s employment violates these restrictions, the employee must be reinstated into active membership, must reimburse CalPERS for any retirement allowance received during the period of the unlawful employment, and must pay CalPERS for the employee’s share of contributions that would have been due on their compensation. Similarly, the annuitant’s employer must pay CalPERS for the employer contributions that would have been due on the employee’s compensation. Both annuitant and employer must reimburse CalPERS for administrative costs. SB 411 was enacted to mitigate the potential impact of violating these provisions, which in some instances have left individual annuitants owing CalPERS tens of thousands of dollars for inadvertent violations of the law.
Under SB 411, CalPERS will now have discretionary authority to require a retired member to reinstate as an active member, rather than reinstatement being mandatory. The bill also provides that retired annuitants and employers who violate the post-retirement work rules are required to pay retroactive contributions for the period of unlawful employment only if the retiree is reinstated to active membership. The bill does not change the obligation to reimburse CalPERS for overpaid pension benefits, or for administrative costs.
(SB 411 amends Sections 21202 and 21220 of the Government Code.)