If you find yourself wanting to return to full-time or part-time work for a CalPERS employer, you’ll need to reinstate from retirement back to active employment status. We’ll go over what you should consider, what this means for your benefits, and how to go through the process of reinstating.
Can I Reinstate to Work While Still Receiving My CalPERS Pension?
No, upon reinstatement your pension will stop, and you’ll go back to receiving a monthly check. If you’d still like to receive your pension while being employed by a CalPERS employer, you’ll need to become a retired annuitant. You can read more about these employment options in Employment After Retirement (PUB 33) (PDF).
Will I Stay a Classic Member Upon Reinstatement?
If you began your employment with a CalPERS-covered employer prior to 2013, then you’re a “classic” member. If you began your employment after 2013, then you’re subject to the California Public Employees’ Pension Reform Act (PEPRA) and will continue as such. It’s also possible to be both a classic and PEPRA member. If you’re exclusively a classic member, before you come out of retirement, it’s important to determine if you’ll keep the same status or change to PEPRA.
This is dependent on:
- Which employer you reinstate to.
- How long you’ve been separated—not retired—from CalPERS employment.
See the PEPRA vs. Classic Membership chart in Reinstatement From Retirement (PUB 37) (PDF) to find out what membership category applies to you.
What Happens to My Cost-of-Living Adjustment?
Cost-of-living adjustments (COLA) are typically paid beginning the second calendar year after you retire and compound annually. Once you reinstate and then re-retire, your COLA is paid out based on your new retirement date and is based on your new retirement benefit, but you don’t retain the compound factor. Because of this, your future benefit may be lower than what it is now.
For example, say you retired eight years ago and your COLA was 2%, and now your COLA factor has compounded to 12.41%. If you choose to reinstate this year, with a planned retirement date of 2024, your first chance at being eligible for COLA would be 2026. Additionally, the COLA factor would be the lower of either the rate of inflation or 2%.
What About My Health Benefits?
If you’re currently enrolled in CalPERS retiree health coverage, you’ll need to enroll in a basic health plan as an active employee with your new employer or get other health coverage. It is possible to resume your retiree health coverage from the employer you first retired with, but there are requirements you must meet. See the list of requirements in Reinstatement From Retirement (PUB 37) (PDF) to learn more.
Does My Golden Handshake Carry Over?
If you received an early retirement incentive offered by your employer, known as a “Golden Handshake,” and you reinstate, this benefit is lost and will not be included in your future retirement. This means your future retirement benefit could be lower than it is now.
How Do I Reinstate?
If after reviewing your options, you feel reinstating back to work is the right choice for you, keep in mind that you can’t reinstate from retirement before you’ve been hired by a CalPERS employer. You must have a firm start date or hire date to reinstate from service retirement into active employment. Your employment start date is the first day you physically return to work.
Additionally, due to the timing of processing your reinstatement application and our calendar cut-off dates for issuing retirement checks, you may incur an overpayment of retirement benefits. If this happens, we will provide written notification of the amount of overpaid benefits and instructions on how to repay.
For a copy of the reinstatement application, as well as more in-depth information on the process, review our publication Reinstatement From Retirement (PUB 37) (PDF).