CalPERS outlines causes of retirement delays: payroll posting, separation dates and unused sick‑leave rules

CalPERS Retirement Benefit Services staff told school employers the most common causes of delayed retirements are untimely payroll postings, missing or incorrect separation dates, and incomplete unused sick‑leave reporting.

“Retirement dates cannot be earlier than or equal to the last day on payroll,” said Tim Herbeck, Retirement Benefit Services. He said employers should report payroll promptly because estimates members receive project payroll from the last posted transaction and late payroll postings can reduce the first benefit distribution. Herbeck said CalPERS encourages members to apply 120 days before a planned retirement so the system can prepare an estimate and pay benefits within its service level (typically within 45 days of a properly submitted retirement).

Herbeck reiterated a statutory rule for unused sick leave: to convert unused sick leave to service credit for school members, the retirement date must be within four months (120 days) of separation, and only sick leave accrued during the normal course of work (as defined in labor agreements) may be counted. He noted CalPERS issued circular letter 20033-22 on June 1, 2022, on the topic and said another audit cycle on unused sick leave was anticipated.

He also described system validations that now prevent payroll posting after a retirement is placed on roll and warned employers that inaccurate or delayed separation dates can trigger wage-reporting errors, retro payroll adjustments and, in some cases, overpayment correction processes.