Fall River
image description

CalPERS Set To Adopt Precedential Decision Regarding Retired Annuitants

  • By: David Prentice

The California Public Employees’ Retirement System (CalPERS) is considering making a precedential ruling requiring that a former public employee reimburse CalPERS in the amount of $56,244.46, which constitutes monies he received while working as a retired annuitant.  Assuming the ruling becomes precedential, it will be cited by CalPERS in subsequent retired annuitant cases.  Therefore, all public agencies need to understand the current climate at CalPERS before considering the retention of a retired annuitant.

The case in question is Dudley J. Lang and City of Industry, Case No. 2018-1112, before the Board of Administration of the California Employees’ Retirement System.  Simply stated, Mr. Lang was employed by the City of Industry for a period of years as the City’s Controller after having retired from that position.   The decision follows a CalPERS audit of the agency Respondent, finding that Mr. Lang’s employment was unlawful and that he should have been reinstated in the system.  The ruling is lengthy tand htet the arguments made are instructive and provide a comprehensive list of legal issues to be considered in any hiring of a PERS annuitant, including:

          •   Three-year statute of limitations found in Government Code section 20164 does not apply to annuitant payments.

          •   Employee’s payrate was too high and exceeded the payrate he received from the City during regular employment.

          •   Employee exceeded the 12-month maximum even if relying on CalPERS Publication 33 because it did not contain an explicit limit.

          •   Employee failed to consult with the City employer or CalPERS regarding the limits on his work as a retired annuitant.

          •   Employee is not entitled to Error or Omission relief under Government Code section 20160 as his employment was not a “mistake” as defined in Code of Civil Procedure 473.

          •   Employee is not entitled to Extra Help Exception under Government Code section 21224.

          •   Employee is not entitled to Vacant Position Exception pursuant to Government Code section 21221, as the City was not recruiting.

 This decision is very instructive as it discusses all defenses to a claim of unlawful annuitant employment and describes in detail the facts which would give rise to these defenses.  One thing is clear, any agency considering the retention of such an employee should seek advice from legal counsel beforehand and advise the prospective employee to do the same.