California law changes retirement rules for public employees

STRS would count all service in California public schools as retired-member activity when a retired member works as an employee, through a third party, or as an independent contractor. This covers members retired for service under STRS who work in the California public school system. Third-party assignments are excluded when all three stated exceptions apply. A third-party assignment is excluded only if it lasts 24 months or less, the employer does not participate in a California public pension system, and the work is not normally done by an employer’s employees. The new definition starts July 1, 2027. The current definition becomes inoperative on that date and is repealed January 1, 2028.

STRS members would have to send signed retirement forms within 30 days and could later elect to convert a Defined Benefit Supplement annuity to a lump-sum payment. These rules cover members applying for STRS service retirement and members receiving an annuity through the Defined Benefit Supplement Program. The conversion requires a system form and any required spouse or registered domestic partner signature. After conversion, annuity payments stop, no additional interest is issued, and the election cannot be undone. A member who receives the entire benefit as a lump sum cannot receive another benefit under that program and cannot use the payment to buy service credit or repay refunded contributions. The 30-day receipt deadlines run from the member’s signature and any required spouse or registered domestic partner signature. The conversion may be elected any time after retirement.

PERS members could buy service credit for up to one year as California Council on Science and Technology fellows, and specified correctional health-care workers would be included as state safety members. The service-credit option covers PERS members who make the required contributions. The safety-member change covers officers and employees of California Correctional Health Care Services and the Department of Corrections and Rehabilitation in listed classifications. The fellowship credit requires the contributions specified by law and must be elected before retirement. Some additional classifications require approval by the Department of Human Resources and the State Personnel Board. Workers newly placed in the safety category may elect to return to their prior status within 90 days after board notification. The supplied text does not state one shared start date for these PERS changes.

County retirement systems outside Los Angeles would have 10 years to act on payment errors caused by a retired member’s or beneficiary’s death, a beneficiary’s remarriage, or fraudulent compensation reports. The rule covers county retirement systems other than the county of the first class and applies to the system, counties or districts, members, retired members, and beneficiaries. For death or remarriage errors, the 10-year period starts when the error is discovered. For fraudulent compensation reports, the period starts on the later of the payment date or discovery of the fraud. The retirement board decides whether the limitation applies. The 10-year periods apply to the specified errors under the new county retirement-system provision. The supplied text does not state a separate effective date.