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CalPERS explains summer session reporting, confirms CCR 5.74 amendment and FTE pay‑rate method
Summary
CalPERS explained when summer session work for classified employees must be reported, how overtime is defined for retirement reporting, and noted an amendment to CCR 5.74 effective Jan. 1, 2025 clarifying full‑time equivalent (FTE) pay‑rate calculations.
CalPERS auditors and compensation staff reviewed how to report summer session and detailed a regulatory amendment that changes how full‑time equivalent pay rates are calculated for classified school members.
Kenneth (Ken) Noss, manager of the Audit, Compliance and Resolution section, told employers that summer session work by classified school employees is reportable to CalPERS when it increases the employee’s services toward the full‑time standard used for retirement reporting. Under the public‑employee retirement rules CalPERS cited, classified full time is 40 hours per week and the retirement system measures full‑time on a 12‑month basis (2,080 hours/year). That means summer session hours that bring a 10‑month classified employee’s total toward the full‑time equivalent must be reported; hours in excess of 40 per week are treated as overtime and are not reportable.
Why it matters: Employers commonly confuse contract months and retirement full‑time definitions. CalPERS said paycheck schedules and public pay schedules must reflect the FTE pay rate used for retirement calculations.
Noss reviewed Government Code language as it relates to pay rate and overtime (as cited during the presentation) and pointed employers to three circular letters CalPERS publishes on reporting compensation as earned, overtime and summer reporting, and examples for reporting. He announced a January 1, 2025 amendment to California Code of Regulations section 5.74 that adds explicit calculation methods for hourly, daily and monthly FTE pay rates for classified members. The method described starts with annual base salary divided by workdays per year and hours per workday to derive an hourly FTE rate, then multiplies by 2,080 and divides by 12 to derive a monthly FTE.
CalPERS also said it published an updated circular letter (Jan. 6, 2025) explaining the CCR 5.74 amendment and that the agency provides an FTE pay‑rate calculator and other resources for employers to verify calculations. Employers were urged to contact the Audit, Compliance and Resolution Unit 1 at moureview@calpers.ca.gov for assistance before audits or retirement transactions.
Ending: CalPERS told attendees to review pay schedules, apply the FTE formulas in CCR 5.74 for classified members, and use the agency’s circular letters and calculator to avoid compensation reporting errors.
