Vol. 20 No. 20- Pers Retirees and 960 Hours

Pers Retirees and 960 Hours
December 27, 2005

Recently, Sacramento implemented several changes regarding definitions and procedures affecting public employees and retirees who fall under the Public Employee Retirement System (PERS). AB 1166 imposed changes which appear to be relatively innocuous in nature, however, the one which has created a significant amount of concern among retired safety members involves a change in how a retiree computes the 960 hours he or she is permitted to work for a PERS agency after retirement.

The law has stated for many years that one who has retired from a PERS agency cannot work thereafter for either that agency or any other public agency under the PERS system, without the retiree being reinstated from retirement, and/or losing or interrupting his or her retirement benefits. The law allowed for an exemption from that prohibition; it permitted a retiree to be employed by a PERS agency for a limited duration, when his or her special skills were needed by that agency. Under no circumstances, however, was the retiree permitted to work more than 960 hours in any calendar year, and such appointments could not exceed a total of 12 months. A calendar year is, obviously, computed from January 1 through December 31 of any year.

AB 1166 changed that time period from a calendar year to a fiscal year, which is computed from July 1 through June 30 th of the following year. Since this new law takes effect January 1, 2006, it will occur in the middle of a fiscal year. As such, the concern was raised as to whether the computation would be applied retroactively- beginning July 1, 2005 through June 30, 2006, or prospectively-beginning July 1, 2006 through June 30, 2007? The difference in the computation could have a significant impact upon any PERS retiree who had already worked for 960 hours between July 1, 2005 and December 31, 2005. In many cases, the retiree and the agency for which the retiree was working, anticipated the employee being able to work an additional 960 hours starting January 1, 2006, since that initiated a new calendar year. If, on the other hand, the new fiscal year begins July 1, 2006 no such problem would exist.

Those potentially affected can rest easily. Based upon the rules of statutory construction, consultation with State Legislative staff members and, most importantly, a A Circular Letter @ issued by PERS the new fiscal year will begin July 1, 2006. The legislation takes effect as of January 1, 2006, and is applied prospectively since, applying it retroactively would deny current PERS retirees a statutory benefit which was already in existence.


The Circular Letter from PERS states:

A The following provides the maximum hours a state agency or public agency may temporarily employ a retired person without reinstatement from retirement or loss or interruption of benefits:

  • January 1, 2006 thru June 30, 2006

      960 hours maximum;
  • July 1, 2006 thru June 30, 2007
    960 hours maximum;
  • Future Fiscal Years
    960 hours maximum.

Based upon a conversation I had with Lori McGartland, the Chief of the Employer Services Division of PERS, and the author of the Circular Letter, if a retiree worked 960 hours between July 1, 2005 and December 30, 2005, he or she can also work 960 hours during the first six months of 2006 and, thereafter, 960 hours each future fiscal year (assuming the retiree is eligible). This allows a “bridge” of six months from the end of the 2005 calendar year to a new fiscal year starting July 1, 2006.

As always, we urge that you confer with your department = s legal counsel for advice and guidance on this as well as any other legal question. Should you wish to discuss this matter in greater detail, please feel free to contact me at 714-446-1400 or e-mail at mjm@jones-mayer.com