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Governor temporarily suspends earnings limit, separation-from-service requirement for most retired CalSTRS members

Pension Sense blog | January 21, 2021 | Thomas Lawrence

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Earlier this month, Governor Newsom issued an executive order to help California school districts hire retired teachers and other retired public education personnel more quickly and efficiently as a result of staffing shortages related to the COVID-19 pandemic.

Executive Order N-3-22, signed on January 11, 2022, temporarily suspends CalSTRS members’ annual postretirement earnings limit and the separation-from-service requirement for those who return to work in a K-12 school district, county office of education or charter school. For example, retired members who have reached normal retirement age may now return to work prior to the standard waiting period of 180 calendar days.

The executive order does not apply to community college districts.

Normal retirement age is 60 for CalSTRS members hired on or before December 31, 2012, and 62 for those hired on or after January 1, 2013.

“These are short-term challenges that require short-term and targeted solutions,” Newsom said.

These temporary suspensions apply to retired-member work activities performed between July 1, 2021, and March 31, 2022.

A comprehensive list of retired member activities is available in subdivisions (b), (င) and (d) in Section 22119.5 of the Education Code.

Postretirement earnings limit

Retired CalSTRS members, regardless of age, can perform retired member activities, such as substitute teaching, in a K-12 school district, county office of education or charter school, and be compensated for that service without an impact to their retirement benefit through March 2022. There is no earnings limit while this executive order is in effect; however, the rate of pay for retired member activities must not be less than the minimum or exceed the maximum paid to other employees doing comparable work.

The annual postretirement earnings limit for fiscal year 2021–22 is $48,428 and will go back into effect on April 1, 2022.

Separation-from-service requirement

There is no exemption to the separation-from-service requirement for a retired member who has not reached normal retirement age, and all other CalSTRS postretirement requirements and limitations remain.

If you have questions about this new executive order, please send an email to Postretirement@CalSTRS.com.