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Update: Governor’s temporary suspension of earnings limit and separation-from-service requirement ends

Pension Sense blog | July 25, 2022 | Thomas Lawrence

Smiling woman with crossed arms in front of blackboard

In January 2022, Governor Newsom issued an executive order to help California school districts address staffing shortages related to the COVID-19 pandemic by allowing districts to hire retired teachers and public education personnel more quickly and efficiently.

Executive Order N-3-22 temporarily suspended CalSTRS members’ annual postretirement earnings limit and the separation-from-service requirement for certain retirees who returned to work in a K–12 school district, county office of education or charter school. For example, retired members who reached normal retirement age were able to return to work prior to the standard waiting period of 180 calendar days. (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 temporary suspensions applied to retired member work activities [Section 22164.5 and subdivisions (b), (c) and (d) in Section 22119.5 of the Education Code have a comprehensive list of these activities] performed between July 1, 2021, and March 31, 2022, and did not apply to community college districts or those employers who did not create the written finding required by N-3-22.

In February 2022, Executive Order N-04-22 extended the Governor’s suspensions through June 30, 2022, for those who met the criteria of N-3-22.

The executive order has officially ended; however, it is possible for a retiree’s employer to apply for an exemption to the 180-day separation-from-service requirement. An employer would now need to:

In addition, the following requirements must be met:

  • The member must be of normal retirement age or older.
  • The member has not received any financial inducement to retire. Financial inducement to retire includes, but is not limited to, any form of compensation or other payment paid directly or indirectly by a public employer to the member.
  • The appointment is a critical need.
  • The member would not be working in the same job from which the member retired.

The form SR 1897 and board resolution must be received prior to the member starting work. (CalSTRS has 30 days to review and provide a determination on these requests.)

Postretirement earnings limit

Retired CalSTRS members, regardless of age, were also allowed to 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 June 30, 2022.

The annual postretirement earnings limit was $48,428 for fiscal year 2021–22 for those not eligible under N-3-22 and N-04-22, and is $49,746 for fiscal year 2022–23. No exemptions are currently available to the annual earnings limit.

If you have questions about these executive orders or the end of the temporary suspensions, please send an email to Postretirement@CalSTRS.com.