There are two ways retirees may return to work with a CCCERA
employer: by suspending their retirement to return to full-time
employment and reinstating as an active CCCERA member (this is
referred to as a “reinstatement”), or on an approved, limited
basis while receiving their pension.
Reinstatement to Active Service After Retirement
After retirement, if you return to work in a position eligible
for membership in CCCERA, you may be reinstated as an active
member, without being subject to the restrictions that apply if
you had continued to receive your pension.
You will not receive a retirement allowance while you are
working. Retirement contributions will be taken from your salary
and you will earn retirement service credit, just as you did
prior to retirement. Your contribution rate will be the same
percentage (flat rate) as all other members in your tier. When
you retire again, your new benefit will be calculated on the most
recent credited service. That benefit amount will be added to
your original retirement allowance, plus any retiree
cost-of-living increases granted while you were reemployed.
Contact a CCCERA counselor to verify what retirement tier you
will be in upon reinstatement.
Re-Employment During Retirement
In situations where the County or district believes a CCCERA
retiree possesses special skills or knowledge, the law allows the
employer to hire that retiree on a temporary basis for a limited
duration without suspending the retiree’s retirement allowance;
however, restrictions apply. Details on the restrictions can be
found below, in the section entitled “Retirees Returning to Work
– Federal and State Law Restrictions.” Some of the key
restrictions are listed here:
- Additional tax for retirees under age 59½ who return to
work without a bona fide separation of service
- Waiting period between retirement date and rehire of a
retiree (with some exceptions for safety members and special
circumstance general members)
- Annual hourly limitations
- Compensation limits
- Not permitted except under specific circumstances as provided
by law (e.g., during an emergency to prevent stoppage of public
business or because the retired person has skills needed to
perform work of limited duration)
Violations of Rule Against Re-Employment Without
Reinstatement
Effective January 1, 2025, if a retired CCCERA member returns to
work in violation of the law, there can be serious financial
consequences for both the employer and the retiree.
Retirees: A retired member employed in violation
of CERL and PEPRA (e.g. exceeding the 960-hour limit) must
reimburse the system for any retirement allowance received during
the period in violation, plus interest. Additionally, the retiree
must pay the retirement system an amount of money equal to the
employee contributions that would otherwise have been paid, plus
interest, for the period of time that the member was employed in
violation of these provisions, and (if applicable) to contribute
toward reimbursement for reasonable administrative expenses of
the system.
Employers: If an employer employs a retired
member in violation of CERL and PEPRA, the employer is required
to pay the retirement system an amount of money equal to the
employer contributions that would otherwise have been paid, plus
interest, for the period of time that the member was employed in
violation of these provisions, and (if applicable) to contribute
toward reimbursement for reasonable administrative expenses of
the system.
Employers that fail to reinstate into membership retired members
that are in violation of CERL and PEPRA, within 30 days of the
effective date of hire may be assessed $200 per month per member
until the member is enrolled.
Employers are also required by law to report to CCCERA the pay
rate and number of hours worked of a retired member employed in
any capacity, without reinstatement. Employers that fail to
provide the required reports to CCCERA may be assessed $200 per
month per member fee.
Retirees Returning to Work – Federal and State Law Restrictions
In situations where the County or district believes a CCCERA
retiree possesses special skills or knowledge, the law allows the
employer to hire that retiree on a temporary basis for a limited
duration without suspending the retiree’s retirement allowance;
however, restrictions apply.
The 960 hour rule: An eligible retiree may
return to work for up to 960 hours in a fiscal year and continue
to receive his/her retirement allowance.
During this post-retirement employment, the member will not
accrue any additional CCCERA pension benefits, nor will the
member or the employer pay contributions for this service.
The 180 days rule: Retired members must wait 180
days from their date of retirement before returning to work for
the County on a temporary basis, except under the following
conditions:
If the employer certifies the nature of the employment and that
the appointment is necessary to fill a critically needed position
before 180 days have passed and the appointment has been approved
by the Board of Supervisors (or the district’s governing body) in
a public meeting.
If the retiree is a public safety officer or firefighter hired to
perform a function that is regularly performed by a public safety
officer or firefighter.
Members who received a retirement incentive, such as an early
separation payoff or a “golden handshake”, are not eligible to
return to work until after 180 days following the date of
retirement.
The 90 day rule: Notwithstanding the above
conditions, to comply with IRS regulations regarding in-service
distributions and protect the retirement fund’s tax-qualified
status, a member under the normal retirement age may not return
to temporary County or district service within 90 days of his or
her retirement date. The 90-day waiting period is referred to as
a bona fide separation from service period. Members who
retire at ages younger than Normal Retirement Age (67 for PEPRA
General members) must have a bona fide separation from service.
This means that they must truly cease employment in order to
collect a retirement allowance, and there must not be a
pre-existing agreement with the employer to return to work after
retirement. If a member is re-employed in violation of the
bona fide separation from service rules, the retirement allowance
must be suspended and will not resume until the member has a bona
fide separation from service or reaches the Normal Retirement
Age.
Limits on Pay Rate: During his or her temporary
employment, the retiree shall be paid at a rate not less than the
minimum nor greater than the maximum rate paid by the employer to
other employees performing comparable duties.
Restrictions for Unemployment Insurance
Recipients: Any retired person who, during the
12-month period prior to a temporary appointment described in
this section, has received unemployment insurance resulting from
prior County or district employment, is not eligible to be
employed and must wait 12 months before being eligible. Upon
accepting an offer of employment, a retiree must certify in
writing that he or she is in compliance with this requirement.
Additional Taxes on Retirement Allowances when Retirees Return to
Work under CCCERA
Even in cases where the retiree is eligible to work for a CCCERA
employer while receiving a retirement allowance from CCCERA
without violating federal or state law, that retirement allowance
could be subject to a 10 percent additional federal tax under
Internal Revenue Code 72(t) and a 2.5 percent additional
California state tax under California Tax Code 17085(c)(1).
These additional taxes apply to retirees under the age of
59 ½, even if they are over Normal Retirement Age if they did not
have a bona fide separation of service (i.e., the required
minimum continuous 90-day separation from service and no
pre-existing agreement with the employer to return to work after
retirement.)
