July 7, 2023
Circular Letter: 200-033-23
Topic: Announcements

To: All CalPERS Employers

Purpose

The purpose of this Circular Letter is to inform you of the impact of Executive Order N-2-23 (PDF) on California Public Employees’ Retirement System (CalPERS) retirees employed as retired annuitants with a CalPERS-covered employer in an assigned response and/or recovery role. Under this new executive order, these suspensions also apply to all local governments that have an assigned response and/or recovery role.

Background

On January 16, 2023, Governor Gavin Newsom issued Executive Order N-1-23 (PDF) due to severe winter storms related to an atmospheric river event beginning on December 24, 2022. The governor included the suspension of some requirements of Government Code (Gov.) sections 21220, 21224(a), and 7522.56(b), (d), (e), and (f) of the Public Employees’ Retirement Law (PERL). Executive Order N-1-23 only applied to state agencies and departments.

Reinstatement Exceptions

Reinstatement requirements under Gov. Code sections 7522.56(b) and 21220 have been suspended.

Work Hour Limitation Exceptions

The limitation that a retiree may only work 960 hours per fiscal year per Gov. Code sections 7522.56(d), 21224(a), and 21229(a) is suspended for retired annuitants employed with a CalPERS-covered employer with an assigned response and/or recovery role. Any hours worked by a retired annuitant to ensure adequate staffing during the state of emergency will not count toward the 960-hour limit for the fiscal year.

Wait Period Exceptions

Under this executive order, the 180-day break in service requirement under Gov. Code sections 7522.56(f) and (g) are suspended for retired annuitants hired to ensure adequate staffing during the state of emergency.

In addition, under the California Code of Regulations section 586.2(c), the state of emergency exempts retired annuitants from the 60-day bona fide separation in service requirement under Gov. Code section 21220.5.

Timeline

The start date for the state of emergency was January 4, 2023. The suspension of the retired annuitant work hour limitation and wait period exceptions started on January 16, 2023 and will remain in place until the state of emergency is lifted.

Continued Compliance

All CalPERS-covered employers must continue to enroll, and report retired annuitants to CalPERS. The remaining working after retirement provisions in Gov. Code sections 7522.56(d), 21224(a), and 21229(a) will continue to apply:

• Compensation for the appointment shall not exceed the maximum monthly base salary paid to other employees performing comparable duties as listed on a publicly available pay schedule divided by 173.333 to equal an hourly rate.
• A retired annuitant shall not receive any benefit, incentive, compensation in lieu of benefits, or other form of compensation in addition to the hourly pay rate.

The executive order applies to work performed by a retired annuitant to ensure adequate staffing during the state of emergency. The director of the California Department of Human Resources (CalHR) must be notified of any individual employed pursuant to these waivers. Notification should be sent to CAStateofEmergency@calhr.ca.gov.

CalPERS will continue to monitor the work hours for retired annuitants covered by this order and send communication to confirm when a violation is found and if it complies with the exceptions.

Questions

If you have questions, call our CalPERS Customer Contact Center at 888 CalPERS (or 888-225-7377 888-225-7377).

 

Renee Ostrander, Chief
Employer Account Management Division