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CalPERS warns school employers: timely, accurate separation dates and demographics prevent overpayments and benefit suspensions
Summary
CalPERS staff detailed employer responsibilities for reporting membership changes, permanent separation dates and member demographics and described new notifications that will warn or suspend retiree benefits if separation dates are missing.
CalPERS membership staff advised school payroll and human-resources officers that accurate, timely reporting of appointments, separation dates and member demographics is required and that errors can cause member arrears, incorrect reciprocal determinations, illegal retirements and suspended benefits.
“It is a requirement at CalPERS that employers report accurate and timely member appointment changes,” said Heather Porter, membership system staff. Porter said a system enhancement launching Aug. 9 will generate a warning letter to employers and retirees if a retiree is placed on roll with a missing separation date; if after two months the separation date is still missing, CalPERS will send a warning letter and at month four it will send a final notice and suspend retirement benefits until the separation date is reported.
Veronica Silvagil, membership reporting, said an internal audit of 25 employers found frequent errors: incorrect names, birth dates, genders, leave-of-absence records, separation dates, invalid appointments and incorrect start dates. She told attendees to confirm hire dates match personnel files, to report leaves of absence when employees stop earning CalPERS-reportable pay, and to enter permanent separations the day after the last day worked.
Porter and Silvagil emphasized specific consequences: employers can be assessed employer-paid member arrears plus a $500 fee for late membership enrollment; incorrect separation dates can cause reciprocal agencies to misclassify enrollment level or formula; failure to separate from all CalPERS-covered employment before retirement can create an “illegal retirement” that results in benefit overpayments a retiree must repay; and missing separation dates can trigger benefit suspension under the Aug. 9 notification process.
CalPERS staff provided resources — the Public Agency and School Reference Guide, myCalPERS retirement enrollment guides, online and live classes — and urged employers to keep historical personnel records and run regular reports (for example, participant/appointment detail reports) to find active appointments that should be separated.
