BILL ANALYSIS �
-SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: SB 1219
Norma Torres, Chair HEARING DATE: April 21, 2014
SB 1219 (Torres) as amended 4/01/14 FISCAL: YES
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM (CalPERS):
WORKING AFTER RETIREMENT
HISTORY :
Sponsor: California Public Employees' Retirement System
(CalPERS)
Other legislation: AB 340 (Furutani),
Chapter 296, Statutes of 2012
SUMMARY :
SB 1219 makes conforming changes to the Public Employees'
Retirement Law (PERL), administered by CalPERS, in order to
bring the PERL into conformity with the Public Employee's
Pension Reform Act of 2013 (PEPRA).
BACKGROUND AND ANALYSIS :
1)Existing law in PEPRA :
a) prohibits a retiree who is receiving a pension
benefit from returning to public employment for an
employer in the same public retirement system from which
he or she is receiving the retirement benefit unless
certain requirements are met:
i) The retiree may not return to employment within 180
days of retirement unless the earlier return is
approved in a public hearing of the employer's
governing body, as specified. However, the retiree is
not eligible for the exemption to the 180-day sit-out
provision if he or she received a retirement incentive
(e.g., a "golden handshake").
The 180-day sit-out provision is not required in the
following cases:
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A retired public safety officer or
firefighter who is hired to perform a public safety
function regularly performed by a public safety
officer or firefighter.
A retiree who is eligible to participate in
the CSU Faculty Early Retirement Program pursuant
to an agreement in a memorandum of understanding
that existed prior to January 1, 2013, or has been
included in subsequent agreements.
i) The retiree may not be employed as a retiree for
more than 960 hours in a calendar or fiscal year, as
determined by the system.
ii) The retiree may not work as a retired public worker
for 12 months after receiving unemployment insurance
for public employment performed while retired.
the retiree must certify to the employer
that he or she is in compliance with this
requirement upon acceptance of an offer of
employment. If found to not be in compliance, he
or she must terminate employment on the last day of
the pay period and may not be eligible for
reemployment for 12 months.
i) The work performed must be either to prevent
stoppage of public business during an emergency or
because the retired person has skills needed to
perform work of a limited duration.
ii) Requires that the pay earned by the retiree may not
be less than the minimum, or exceed the maximum, paid
to other employees of the employer performing
comparable duties and divided by a specified factor to
equal an hourly rate.
iii) Specifies that the retiree may not receive any other
pay or benefits in excess of the hourly rate and may
not receive service credit or retirement benefits for
the employment.
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a) prohibits a public retiree who is first appointed on
or after January 1, 2013, to a full-time, salaried
position on a state board or commission from receiving
both a full-time salary and a pension, and makes the
following requirements in those situations:
i) Defines full-time as an appointment paying more than
$60,000 annually. This amount is increased
proportionally in any year state employees receive a
general salary increase.
ii) Requires a retired full-time appointee to choose to
receive either 1) a salary and instatement or
reinstatement into the retirement system for that
service, or 2) the retirement allowance and per diem
paid to all other related board and commission members
and to forgo the salary and instatement or
reinstatement in the retirement system.
iii) Allows the individual who instates or reinstates,
upon subsequent retirement, to regain any suspended
benefits, including retiree health benefits, to which
he or she was entitled prior to retirement.
iv) Exempts an appointee as a Commissioner to the State
Board of Parole Hearings from these restrictions and
allows that appointee, if retired, to receive both
salary and retirement benefit. However, in that case,
the individual does not earn service credit and many
not instate or reinstate in CalPERS for that service.
a) allows certain retired individuals to serve without
reinstatement or restriction in the following
situations:
i) As a subordinate judicial officer whose position,
upon retirement, is converted to a judgeship and she
or he returns to work in the converted position and
the employer is a trial court.
ii) As a retiree who takes office as a judge of a court
of record, as specified, or a retiree of the Judges
Retirement System or the Judges Retirement System II
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who is appointed to serve as a retired judge.
1)Existing law in PERL :
a) in the case of CSU academic retirees returning to
academic employment, sets a limit on employment of the
lesser of 960 hours or 50% of the hours the individual
worked in the fiscal year prior to retirement.
b) requires that an employee who has not reached normal
retirement age have a bona fide separation from service,
as required in the Internal Revenue Code, before
returning to work as a retired worker.
c) requires that a person who is unlawfully employed as
a retiree shall be reinstated to membership in CalPERS
in the category in which, and as of the date on which,
the unlawful employment occurred, and makes the
following requirements in those cases:
i) The retiree must reimburse CalPERS for any
retirement allowance received in violation of the law;
pay employee contributions that would otherwise have
been paid during the period of unlawful employment,
plus interest; and pay resultant administrative costs
if the board determines that the employee was at
fault.
ii) The employer must also pay employer contributions to
CalPERS that would otherwise have been paid during the
period of unlawful employment, plus interest, and pay
resultant administrative costs if the board determines
that the employer was at fault.
a) creates a program that allows a disabled safety
officer who retires for industrial disability to
continue working in a non-safety or unrelated safety
position, either full or part-time, and to receive his
or her salary plus all or a portion of the pension to
equal the salary the individual was receiving while
employed as a safety officer. If the retired safety
officer is performing service in a safety position, the
work duties must be substantially different from those
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from which the safety officer was industrially retired
(for example, a police officer may work in the training
academy, or a firefighter may work as an inspector).
While working in this program, the disabled safety
officer is not earning credit in the retirement system
or participating as an active member for that subsequent
employment. Upon separation, the former disability
retirement allowance resumes based on the individual's
original benefit amount. While non-safety employees are
also eligible for this program, of approximately 230
participants, only a few are disabled non-safety
employees.
b) allows a retiree who is elected to public office to
serve without loss of benefits; however, if all or part
of the retiree's benefit is based on service in that
elected office, that portion of the benefit is suspended
while the individual is serving in the elected office.
1)This bill :
a) repeals the article in PERL relative to working after
retirement and rewrites its provisions to incorporate
requirements of PEPRA, eliminate provisions of PERL in
conflict with PEPRA, and to retain provisions of PERL
that are specific to PERL or are not referenced in
PEPRA.
b) specifically, this bill, in addition to incorporating
provisions of PEPRA:
i) Specifies that the 960 hour rule applies to a
fiscal year;
ii) Retains the requirement for a bona fide break in
service for individuals who retire prior to normal
retirement age;
iii) Retains penalties to employees and employers who are
deemed to have purposefully worked or provided
employment unlawfully following the employee's
retirement;
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iv) Retains references to CSU retirees, who are specific
to CalPERS;
v) Retains the program to allow disabled retirees to
work in public employment and receive a blended salary
of compensation and retirement benefit up to the
retiree's pre-retirement compensation; and
vi) Retains the provision exempting retirees who are
elected to public office.
FISCAL :
None cited.
COMMENTS :
1)Argument in Support :
According to the sponsor, "CalPERS recognizes the need for
ongoing clarification and
conformity of the Public Employees' Retirement Law (PERL) to
the pension reforms
signed into law in 2012. SB 1219 will serve as the
legislative vehicle for consensus clarifications and
conformity provisions related to the PEPRA and
post-retirement public employment."
2)SUPPORT :
California Public Employees' Retirement System (CalPERS),
Sponsor
Rural County Representatives of California (RCRC)
3)OPPOSITION :
None on file.
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