The State Worker

California tightens rules for going back to work after CalPERS disability retirement

A new California law tightens requirements for CalPERS pensioners who go back to work after retiring on disability.

The law focuses on retired annuitants, who can return to work after retirement and keep collecting pension benefits under certain conditions, including that they wait 180 days to go back to work and then work less than 960 hours per year.

Annuitants who retired on disability can’t return to the same job they had or to jobs with the same duties at CalPERS employers, the new law specifies. Gov. Gavin Newsom signed a bill created the law July 12.

Around 600 annuitants who retired on disability with a CalPERS pension are working, and the fund hasn’t verified that they’re all in different positions than those from which they retired, according to the fund’s analysis.

“Because (retired annuitants) do not require approval from CalPERS prior to accepting these positions, there is a possibility that members receiving a (disability retirement) allowance may be working in a position that is the same or similar to the position from which they originally retired for disability,” the analysis states.

The law goes into effect Jan. 1, 2020. If retired annuitants working now are found to be ineligible for their current jobs under the new law, CalPERS will evaluate those cases individually, said CalPERS spokeswoman Amy Morgan.

The law includes a new requirement that employers who hire disability retirees must report to CalPERS the retiree’s duties, so CalPERS can verify they are eligible for the work.

Former Gov. Jerry Brown’s pension law added new requirements for returning to work after CalPERS disability retirements, but didn’t include specific language about retired annuitants, according to the CalPERS analysis.

If retirees go back to work full-time at a CalPERS employer, rather than as a retired annuitant, they must reinstate. Reinstatement involves resuming payments to the pension fund and forfeiting pension payments while working. Retirees may do that and retire again, but must follow specific rules.

CalPERS has a tip line at 888-330-5770 to report disability fraud. It received 271 tips from 2014 through 2018, Morgan said in an email.