• Assembly Bill 1028 Tightens Rules Governing the Employment of CalPERS Retirees
  • December 15, 2011 | Authors: Isabel Cesanto Safie; John D. Wahlin
  • Law Firm: Best Best & Krieger LLP - Riverside Office
  • Effective January 1, 2012, the rules on employing CalPERS retirees without re-instatement as an active CalPERS member pursuant to Government Code Sections 21221(h) and 21224 will be changing. Described as a housekeeping bill designed to “clean up” various provisions of the Public Employees’ Retirement Law, AB 1028 may nonetheless change the manner in which an agency appoints CalPERS retirees under Sections 21221(h) and 21224. While the amendments to Section 21224 are modest, AB 1028 makes significant changes to Section 21221(h) which are intended to codify implicit limitations.  

    AB 1028 amends Section 21224 to clarify that an appointment under this Section is only temporary and that the retiree must possess specialized skills. These are not new requirements. In fact, the “temporary” nature of the appointment has always been implicit in the requirement that the work to which the retiree is appointed be of “limited duration.” Further, while the word “specialized” is not presently in the body of the statute, it is contained in the heading and, therefore, the codified requirement that retirees have specialized skills does not come as a surprise.

    While the amendments made by AB 1028 to Section 21221(h) appear to be far more significant, they are merely a codification of implicit requirements. However, prior to the passage of AB 1028 CalPERS had been unable to enforce those implicit limitations because they were not incorporated into the statute. As a result, these amendments may effectively change if and how an agency appoints retirees under Section 21221(h). Specifically, the amendments will limit appointments under Section 21221(h) to a position that is vacant and only while the agency is actively recruiting for a permanent appointment, reinforces the time limitation on the appointment to a 12-month term and clarifies that the appointment cannot continue under any other section, including Section 21224. Finally, it limits the retiree’s compensation to the maximum published pay schedule for the vacant position.

    All other rules affecting the employment of CalPERS retirees remain unchanged. This includes the requirement that employees retiring before they reach normal retirement age achieve a bona fide separation of employment of at least 60 days before they commence employment with a CalPERS agency. It also includes the prohibition on employing a retiree who has collected unemployment during the 12 months preceding an appointment under Section 21224 and the 960-hour limitation for appointments under Sections 21221(h) and 21224.

    Assembly Bill 344, a companion bill that has not been passed, was designed to go into effect only if it was enacted before AB 1028. Since AB 1028 was enacted on October 3, 2011 and AB 344 has not been passed, the provisions in AB 344 affecting Section 21221(h) will not go into effect even if the bill is passed at a later date. If passed prior to AB 1028, AB 344 would have amended Section 21221(h) to eliminate the option for a retiree to serve without reinstatement under an appointment that exceeds 960 hours in any fiscal year if the CalPERS board fails to reject a request for an extension.