PURPOSE

The purpose of this policy is to clarify how Government Code section 7522.56 applies to 
post-retirement   employment   of   Sacramento   County   Employee’s   Retirement   System
(SCERS) retired members by or in service to participating SCERS employers.

POLICY

This  policy  is  applicable  to  all  SCERS  retired  members  returning  to  work  for  a  SCERS 
participating  employer,  including  the  following:  an  employee  working  through  a  private 
third-party employer where  that  employee  is  providing direct services to a  participating 
employer, an  independent contractor of a participating employer, or a direct employee of a 
participating employer.

The phrase  ”an  employee  working  through  a  private  third-party  employer  where  that 
employee  is  providing  direct  services  to  a  participating  employer”  should  be  construed 
broadly.  That term includes, without limitation, a retired member who (a) works for a private 
third-party company that has a contract with a participating employer, and (b) under that contract, performs work   that   involves   serving   and   engaging   with   the   participating 
employer.  However, the term does not include a retired member who (a) works for a private 
third-party company that has a contract with a participating employer, but  (b) performs work for 
the private company that is unrelated to that contract or the participating employer.

Section 7522.56 defines how quickly the retiree can return to work, how much the retiree can be  
paid,  and how many hours the retiree can work annually.  The  SCERS  Board further  
determines that only hours actually  worked  or  taken  within  the  calendar  year  or fiscal 
year, including overtime hours, will apply to the maximum limit of 960 hours as set forth  in  
subdivision  (d)  of  section  7522.56.  Earned  credit  for  vacation,  sick  leave,  or 
compensatory time off  (CTO) if not actually worked or taken, does not  apply to the 960- hour 
maximum in subdivision  (d).

This policy does not apply to a retired SCERS member working in private industry or for any other 
non-SCERS employer, so long as the employee is not providing direct services to a SCERS 
participating employer.

SCERS approval is not required for a SCERS retired member to return to part-time work for  a  
participating employer under  section 7522.56.   However,  subdivision  c) of  section 7522.56  
states that a  retired person  can  return  to  work  only  during  an  emergency  to prevent a 
stoppage of public business or because the retired person has the skills needed to  perform  work  
of  a  limited  duration  [emphasis  added].  This  policy  determines  that  the term limited 
duration is a period of 36 continuous months.

This policy further determines that a participating employer may provide a retired
member with a 12-month extension on an annual basis up to two times, for a total of an
additional 24 months beyond the initial 36-month period, if each 12-month extension is
approved by the participating employer’s chief executive.  Each  12-month  extension  does  
not  need  to be contiguous to the initial 36-month period or other 12-month extension.

A  participating  employer’s  chief  executive  may  provide  a  retired  member  working  in  a 
public  safety  capacity  additional  12-month  extensions  on  an  annual  basis  to  fulfill  
public safety workforce needs.

For  purposes  of  this  policy,  the  County  Executive  can  designate  the  Director  of  the 
Department of Personnel Services to approve extensions to the limited-duration periods on
behalf of all Sacramento County departments.

APPLICATION

It  is the  employer’s responsibility to  determine  the appropriate  use of  retired  members to 
meet public business needs in accordance with subdivision c) of Section 7522.56.
Participating  employers  shall  establish  an  administrative  process  to  monitor  and  track 
SCERS  retired  members  returning  to  part-time  work,  consistent  with  section  7522.56. The  
limited-duration  period  starts  when  the  retired  member  begins  working  actual  hours, not 
when the retired member is hired.
Participating  employers  shall  provide  SCERS  a  report,  no  less  than  semi-annually   by 
January 31  and July 31 of each year), disclosing the names of the retired members who have  been  
employed,  their  hours  worked,  their  duration  of  retired  annuitant  service,  and any 
extensions to the 36-month period approved by the chief executive.
It is the participating employer’s responsibility to monitor and manage the retired member’s work  
hours  to  ensure  compliance  with  this  policy  and  statute.  Participating   employers shall 
notify  SCERS when retired members have exceeded the maximum  number of hours worked under 
Government Code section 7522.56.
Any  retired  member  who  works  more  than  the  maximum  number  of  hours  provided  in section 
7522.56, or who works beyond the initial 36-month reemployment limited duration period  with  a  
SCERS  participating  employer  or  third-party  employer  providing  contract services  to  a  
SCERS  participating  employer,  other  than  approved  extensions,  may  be reinstated  into  full 
membership, and  SCERS  may suspend  the  retirement benefit  to  such retired members as provided 
by section 7522.56.
Such  reinstatement  to  active  employment  will  suspend  the  retired  member’s  retirement 
benefit  until  such  time  as  he/she  decides  to  re-retire.  Upon  reinstatement,  the  
employee and employer will both be required to pay contributions  (including interest) for the 
period of unlawful  employment.  Upon  re-retirement,  should  the  retiree  wish  to  return  as  
a  retired member to work for a SCERS participating employer, the return-to-work rules from  
section
7522.56 will again apply.

EFFECTIVE DATE

This policy is effective July 1, 2019. On the effective date, members who are currently or
who  will  be  serving  as  retired  member  shall  have  the  limited-duration  period  applied prospectively.

BACKGROUND

In 2013, the California Legislature instituted broad pension reforms with the enactment of the  
Public  Employees’  Pension  Reform  Act  (PEPRA).  These  reforms  impose    additional
restrictions on retired members looking to return to work without reinstatement.

RESPONSIBILITIES

Executive Owner:    Chief Benefits Officer

POLICY HISTORY

Date	Description
03-18-2020	Board approved revised policy
05-15-2019	Board approved policy
03-20-2019	Staff presented Board discussion draft of revised policy for dissemination to stakeholders
08-01-2018	Renumbered from 025
12-20-2017	Board affirmed in revised policy format
06-17-2015	Board amended policy
05-06-2015	Board approved policy

SCERS Policy No. 011

FAQs – May 2019

1.Q. Who does this effect?

Retired SCERS members who return to work for a SCERS participating employer (i.e. Sacramento County, Sacramento Superior Court, and other special districts).

2.Q. Why is the policy being amended?

SCERS is clarifying several provisions of the current policy to ensure more consistent application with the law.

3.Q. Does SCERS decide who can be a retired annuitant?

No. It is the employer’s responsibility to determine who should work as a retired annuitant to meet public business needs. SCERS’ role is to ensure proper oversight of the retired annuitant process.

4.Q. What is being changed?

Major amendments to the policy include the following:

• Clarifying that retired annuitant limits apply to all types of contractors. The current policy exempts “Independent Contractor” from the retired annuitant restrictions. However, the governing statute does not differentiate between independent contractors or third-party contractors. Subdivision (b) of Section 7522.56 of the Government Code states that the return-to-work rules apply to retired members who are “employed through a contract directly by” the employer. SCERS advises retired employers and members to adhere to the 180-day wait period before returning to work and to the 960-hour cap on hours, regardless of a member’s designation as a contractor.
• Clarifying which hours apply toward the 960-hour annual cap. This policy clarifies that hours worked or taken, including overtime hours, are counted towards the maximum annual limit of 960 hours. However, earned credit for vacation, sick leave, or compensatory time off (CTO) if not actually worked or taken, do not apply to the 960-hour maximum limit. SCERS does not consider the hour equivalent of leave balances that are paid out upon termination as part of the 960-hour cap.
• Defining limited duration. Retired members can return to work only during an emergency to prevent a stoppage of public business or because the retired person has the skills needed to perform work of a limited duration. However, section 7522.56 does not define the term limited duration. This policy defines limited duration as a 36-month period.
• Establishing a process to extend the duration of retired annuitant service. This policy directs participating employers to establish an administrative approval process to grant 12-month extensions to the 36-month limited duration period. However, the policy limits the extensions to a total of an additional 24-months beyond the original 36-month period.
  The policy allows the employer to provide additional 12-month extensions on an annual basis to retired annuitants working in a public safety capacity, upon approval of the employer’s chief executive.
• Requiring semi-annual reports from employers. This policy requires participating employers to provide SCERS a report no less than semi-annually (by January 31 and July 31 of each year) disclosing the names of the retired annuitants who have been employed, their hours worked, their duration of retired annuitant service, and any extension to the 36-month period approved by their chief executive.

5.Q. When is the policy effective?

The policy is effective July 1, 2019.

6.Q. What happens if I am currently working as a retired annuitant?

The limited-duration period applies prospectively to members who were serving as retired annuitants on July 1, 2019, or who previously served as retired annuitants before July 1, 2019. The time spent previously working as a retired annuitant will not count against the limited-duration period.

6.Q. Is the 36-month limited-duration period continuous?

Yes. The 36-month period starts when the retired annuitant begins working actual hours, not when hired. However, the 12-month extensions do not need to be contiguous to the 36-month period.

For example, if a retired annuitant begins working actual hours on March 1, 2019, the 36-month clock begins on March 1, 2019 and ends 36 months later, on February 28, 2022. To continue working beyond the 36 months, the employer needs to approve a 12-month extension for the retired annuitant. The extension can be granted for a 12-month period at any time; it does not need to be for worked performed immediately after the initial 36 months.

See: Governor Relaxes Post-Retirement Employment Rules During Pandemic

June 15, 2021 Update: New Executive Orders Issued for Post-Retirement Employment