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Clarification on Implementation of AB 1028

January 26, 2012
AB 1028, authored by the Assembly Committee on Public Employees, Retirement and Social Security (Committee), went into effect Jan. 1. This bill made several changes to various sections of the Government Code related to the California Public Employees' Retirement System (CalPERS).

The changes cities are asking the most questions about relate to the employment of retired annuitants.

Today, CalPERS released a Circular Letter with the subject line "Information on AB 1028 Changes to Employment After Retirement" to provide further guidance to public agencies on the implementation of AB 1028. The letter has been posted on the League's website.

The Public Employment Retirement Law (PERL) clearly identifies conditions and limitations on post retirement employment. AB 1028 was drafted with the intent to clarify these laws. The bill made changes to Government Code (GC) Sections 21221, 21224, 21228, and 21229. The changes made by AB 1028 are highlighted below.

Changes made to Government Code Section 21224

Public agency employers that appoint retirees under this section do not require governing body approval. Public agency employers can appoint a retiree under this section under two circumstances: (1) during and emergency to prevent work stoppage or public business or (2) because the retiree has specialized skills. The word specialized was added to this section because the term was already used in other parts of the statue related to post retirement work. CalPERS does not define specialized skills. It is up to the public agency employer to define specialized skills.

Employment of a retiree under this section should be temporary. Prior to AB 1028, the law already required that appointments under this section should be for a limited duration.

Changes to Government Code Section 21228

If a public agency employer appoints a retiree under this section, which relates to employment after a disability retirement, the employer cannot also concurrently appoint them under other statutes related to post retirement work.

Changes to Government Code Section 21221

Appointment of a retiree under this section must be made by the governing body of a contracting agency. The appointment must be an interim appointment to a vacant position during recruitment for a permanent appointment and deemed by the governing body to require specialized skills or during an emergency to prevent a stoppage of public business.

Compensation for appointments made under this section cannot exceed the maximum published pay schedule for the vacant position.
Appointments under this section can only be made one time.

Employment under this section cannot continue under other statutes related to post retirement work after the 12 month appointment is complete.

The changes to this section attempted to make clear that retirees appointed by the government body should be for a limited duration and therefore clarified that the exception available under this section to the 960-hour rule is only a one-time exception.

The League recommends that you consult your city attorney if the changes to this statute raise any questions about your agencies practices related to employing retired annuitants.

For questions related AB 1028 please contact Natasha Karl.

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