Amended in Senate April 1, 2014

Senate Bill No. 1219

Introduced by Senator Torres

February 20, 2014

An act to amend Sections 19144 and 21202 of, and to repeal and add Article 8 (commencing with Section 21220) of Chapter 12 of Part 3 of Division 5 of Title 2 of, the Government Code, relating to public employees’ retirement.

LEGISLATIVE COUNSEL’S DIGEST

SB 1219, as amended, Torres. Public employees’ retirement: service after retirement.

Existing law, the California Public Employees’ Pension Reform Act of 2013 (PEPRA) establishes various limits on retirement benefits generally applicable to a public employee retirement system in the state, except as specified, and among other things, prescribes limits on service after retirement without reinstatement into the applicable retirement system. The Public Employees’ Retirement Law (PERL) establishes the Public Employees’ Retirement System (PERS) for the purpose of providing pension benefits to specified public employees. PERS is subject to the limits established by PEPRA, and PERL also prescribes limits on service after retirement without reinstatement that have been superceded by PEPRA.

The bill would repeal the superceded provisions in the PERL described above and would add provisions limiting service after retirement without reinstatement that conform with the requirements of PEPRA, with certain additions. The bill would specify that a retired person appointed without reinstatement, under those limitations, is prohibited from receiving any benefit, incentive, or compensation in lieu of benefits. The bill would add similar provisions specifically addressing service by academic staff of the California State University. The bill would require that a person who has not attained normal retirement age have a bona fide separation from employment, as specified, before working after retirement. The bill would prescribe the consequences for working without reinstatement in violation of these prohibitions, which would include reinstatement in PERS, reimbursement of retirement allowance received, and additional contributions to the system, as specified. begin insert The bill would authorize employment without reinstatement, as specified, for a person who retired with a disability but has not attained the mandatory age for retirement applicable to persons in the employment in which he or she will be employed, and whom the board finds is not disabled for that employment. end insert The bill would except from the restrictions on service without reinstatement specified judicial officers, judges, and elective officers. The bill would require the suspension of a retirement allowance of certain elective officers whose allowances are based on service in that office, which allowances would then resume after the office is vacated.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 19144 of the Government Code is
amended to read:

19144.  

Subject to Article 8 (commencing with Section 21220)
of Chapter 12 of Part 3, a person who has retired from state civil
service may be employed temporarily in a civil service position
at any time following retirement, provided that the position is
either:

(a) In the class in which the person had permanent or
probationary status or a career executive assignment appointment
at the time of retirement.

(b) In another class to which the person could have been
permanently transferred, reinstated, or demoted at the time of
retirement.

SEC. 2.  

Section 21202 of the Government Code is amended
to read:

21202.  

A person employed in violation of Section 21221 shall
be reinstated to membership in the category in which, and on the
date on which, the unlawful employment occurred.

SEC. 3.  

Article 8 (commencing with Section 21220) of Chapter
12 of Part 3 of Division 5 of Title 2 of the Government Code is
repealed.

SEC. 4.  

Article 8 (commencing with Section 21220) is added
to Chapter 12 of Part 3 of Division 5 of Title 2 of the Government
Code, to read:

 

Article 8.  Employment After Retirement

 

21220.  

This article shall be deemed to comply with Article 4
(commencing with Section 7522) of Chapter 21 of Division 7 of
Title 1, known as the California Public Employees’ Pension Reform
Act of 2013, and shall be considered to further its purposes,
including, but not limited to, the purposes of Sections 7522.56 and
7522.57.

21221.  

(a) This section shall apply to any person who is
receiving a pension benefit from this system.

(b) A retired person shall not serve, be employed by, or be
employed through a contract directly by, a public employer in this
system if the retiree receives the benefit without reinstatement
from retirement, except as permitted by this article.

(c) A person who retires from a public employer in this system
may serve without reinstatement from retirement or loss or
interruption of benefits provided by this system upon appointment
by the appointing power or the governing body of a public
employer either during an emergency to prevent stoppage of public
business or because the retired person has skills needed to perform
work of limited duration.

(d) (1) Appointments of the person authorized under this section
shall not exceed a total for all employers in this system of 960
hours in a fiscal year. The monthly rate of pay for the employment
shall not be less than the minimum, nor exceed the maximum, paid
by the employer to other employees performing comparable duties,
divided by 173.333 to equal an hourly rate. A retired person
appointed pursuant to this section shall not receive any benefit,
incentive, compensation in lieu of benefits, or other form of
compensation in addition to the hourly pay rate. A retired person
whose employment without reinstatement is authorized by this
section shall acquire no service credit or retirement rights under
this section with respect to the employment unless he or she
reinstates from retirement.

(2) Appointments of the person authorized under this section
as a member of the academic staff of the California State University
shall not exceed a total for all employers in this system of 960
hours in a fiscal year or 50 percent of the hours the member worked
during the last fiscal year of service prior to retirement, whichever
is less. The monthly rate of pay for the employment shall not be
less than the minimum, nor exceed the maximum, paid by the
employer to other employees performing comparable duties,
divided by 173.333 to equal an hourly rate. A retired person
appointed pursuant to this section shall not receive any benefit,
incentive, compensation in lieu of benefits, or other form of
compensation in addition to the hourly pay rate. A retired person
whose employment without reinstatement is authorized by this
section shall acquire no service credit or retirement rights under
this section with respect to the employment unless he or she
reinstates from retirement.

(e) (1) Notwithstanding subdivision (c), any retired person shall
not be eligible to serve or be employed by a public employer in
this system if, during the 12-month period prior to an appointment
described in this section, the retired person received any
unemployment insurance compensation arising out of prior
employment subject to this article with a public employer. A retiree
shall certify in writing to the employer upon accepting an offer of
employment that he or she is in compliance with this requirement.

(2) A retired person who accepts an appointment after receiving
unemployment insurance compensation as described in this
subdivision shall terminate that employment on the last day of the
current pay period and shall not be eligible for reappointment
subject to this section for a period of 12 months following the last
day of employment.

21222.  

(a) A retired person shall not be eligible to be employed
pursuant to this article for a period of 180 days following the date
of retirement unless he or she meets one of the following
conditions:

(1) The public employer certifies the nature of the employment
and that the appointment is necessary to fill a critically needed
position before 180 days has passed and the appointment has been
approved by the governing body of the employer in a public
meeting. The appointment may not be placed on a consent calendar.

(2) The state employer certifies the nature of the employment
and that the appointment is necessary to fill a critically needed
state employment position before 180 days has passed and the
appointment has been approved by the Department of Human
Resources. The department may establish a process to delegate
appointing authority to individual state agencies, but shall audit
the process to determine if abuses of the system occur. If necessary,
the department may assume an agency’s appointing authority for
retired workers and may charge the department an appropriate
amount for administering that authority.

(3) The retiree is eligible to participate in the Faculty Early
Retirement Program pursuant to a collective bargaining agreement
with the California State University that existed prior to January
1, 2013, or has been included in subsequent agreements.

(4) The retiree is a public safety officer or firefighter hired to
perform a function or functions regularly performed by a public
safety officer or firefighter.

(b) A retired person who accepted a retirement incentive upon
retirement shall not be eligible to be employed pursuant to this
section for a period of 180 days following the date of retirement
and subdivision (a) shall not apply.

21223.  

A retired person who has not attained the normal
retirement age shall have a bona fide separation in service to the
extent required by the Internal Revenue Code, and the regulations
promulgated thereunder, before working after retirement pursuant
to this article. The board shall establish, by regulation, the criteria
under which a bona fide separation is satisfied.

21224.  

(a) A person employed in violation of this article shall
be reinstated to membership in the category in which, and on the
date on which, the unlawful employment occurred.

(b) Upon reinstatement, the retired member employed in
violation of this article shall:

(1) Reimburse this system for any retirement allowance received
during the period or periods of employment that are in violation
of law.

(2) Pay to this system an amount of money equal to the
employee contributions that would otherwise have been paid during
the period or periods of unlawful employment, plus interest
thereon.

(3) Contribute toward reimbursement of this system for
administrative expenses incurred in responding to this situation,
to the extent the member is determined by the executive officer to
be at fault.

(c) Any public employer in this system that employs a retired
member in violation of this article shall, upon reinstatement of the
retired member:

(1) Pay to this system an amount of money equal to employer
contributions that would otherwise have been paid for the period
or periods of time that the member is employed in violation of this
article, plus interest thereon.

(2) Contribute toward reimbursement of this system for
administrative expenses incurred in responding to this situation,
to the extent the employer is determined by the executive officer
of this system to be at fault.

(d) This section shall not apply to violations under subdivision
(e) of Section 21221.

21225.  

(a) This section shall apply to any retired person who
is receiving a pension benefit from a public retirement system and
is first appointed on or after January 1, 2013, to a salaried position
on a state board or commission.

(b) A person who is retired from a public retirement system
may serve without reinstatement from retirement or loss or
interruption of benefits provided that appointment is to a part-time
state board or commission. A retired person whose employment
without reinstatement is authorized by this subdivision shall acquire
no benefits, service credit, or retirement rights with respect to the
employment. Unless otherwise defined in statute, for the purpose
of this section, a part-time appointment shall mean an appointment
with a salary of no more than sixty thousand dollars ($60,000)
annually, which shall be increased in any fiscal year in which a
general salary increase is provided for state employees. The amount
of the increase provided by this section shall be comparable to,
but shall not exceed, the percentage of the general salary increases
provided for state employees during that fiscal year.

(c) A person who is retired from the Public Employees’
Retirement System shall not serve on a full-time basis on a state
board or commission without reinstatement unless that person
serves as a nonsalaried member of the board or commission and
receives only per diem authorized to all members of the board or
commission. A person who serves as a nonsalaried member of a
board or commission shall not earn any service credit or benefits
in the Public Employees’ Retirement System or make contributions
with respect to the service performed.

(d) A person retired from a public retirement system other than
the Public Employees’ Retirement System who is appointed on a
full-time basis to a state board or commission shall choose one of
the following options:

(1) The person may serve as a nonsalaried member of the board
or commission and continue to receive his or her retirement
allowance, in addition to any per diem authorized to all members
of the board or commission. The person shall not earn service
credit or benefits in the Public Employees’ Retirement System and
shall not make contributions with respect to the service performed.

(2) (A) The person may suspend his or her retirement allowance
or allowances and instate as a new member of the Public
Employees’ Retirement System for the service performed on the
board or commission. The pensionable compensation earned
pursuant to this paragraph shall not be eligible for reciprocity with
any other retirement system or plan.

(B) Upon retiring for service after serving on the board or
commission, the appointee shall be entitled to reinstatement of any
suspended benefits, including employer provided retiree health
benefits, that he or she was entitled to at the time of being
appointed to the board or commission.

(e) Notwithstanding subdivisions (c) and (d), a person who
retires from a public employer may serve without reinstatement
from retirement or loss or interruption of benefits provided by the
retirement system upon appointment to a full-time state board
pursuant to Section 5075 of the Penal Code.

begin insert

begin insert 21226. end insert   

A person who has retired for disability and has not
attained the mandatory age for retirement for persons in the
employment in which he or she will be employed, and whom the
board finds is not disabled for that employment, may be so
employed by any employer without reinstatement from retirement
if the position is not the position from which this person retired
or a position in the same member classification. The person’s
disability retirement pension shall be reduced during this
employment to an amount that, when added to the compensation
received, equals the maximum compensation earnable by a person
holding the position that he or she held at the time of retirement.
This employment shall terminate upon the person’s attainment of
the mandatory retirement age for persons in that employment. A
person employed under this section shall not be concurrently
employed under this article.

end insert

21230.  

A retired person may serve without reinstatement from
retirement or loss or interruption of benefits provided by this
system, as follows:

(a) (1) As a subordinate judicial officer whose position, upon
retirement, is converted to a judgeship pursuant to Section 69615,
and he or she returns to work in the converted position, and the
employer is a trial court.

(2) As a retiree who takes office as a judge of a court of record
pursuant to Article VI of the California Constitution or a retiree
of the Judges’ Retirement System I or the Judges’ Retirement
System II who is appointed to serve as a retired judge.

(b) (1) As an elective officer.

(2) If a retired person serves without reinstatement from
retirement in an elective office and part or all of his or her
retirement allowance is based on service in that elective office,
the portion of the allowance based on service in that elective office
shall be suspended during incumbency in that elective office. The
entire retirement allowance shall be paid for time on and after the
person vacates the elective office in the monthly amount payable
had the allowance not been suspended. The governing body of
every employer other than the state shall cause immediate notice
to be given to this system of the election of any retired person to
an office of the employer.