Ask the CEO | July 12, 2024

Recent legislation, Senate Bill 765, will temporarily increase the annual postretirement earnings limit and adjust the process for obtaining an exemption to the 180-calendar day separation-from-service requirement for CalSTRS retired members who return to work in the California public school system effective July 1, 2024, through June 30, 2026.

SB 765 will not affect your ability to return to work as a retired member, but generally, you must wait 180-calendar days from your benefit effective date to start working, or you could risk a reduction to your retirement benefit. Your postretirement earnings will also be subject to an annual limit of $74,733 for the 2024–25 school year.

The postretirement earnings limit is adjusted annually and is equal to 70% of the median final compensation amount for all members who retired for service during the fiscal year ending in the previous calendar year. If you return to work within 180-calendar days of your most recent retirement date or have earnings in excess of the annual postretirement earnings limit in a school year, your CalSTRS retirement benefit will be reduced dollar for dollar by any compensation earned, up to the benefit payable during that period.

There is an existing narrow exemption from the 180-calendar day separation-from-service requirement for members returning to work under specific circumstances. While SB 765 is in effect, employers requesting this exemption will use a different process than in previous years.

If your employer is pursuing this exemption for you, please be aware that the request for exemption and all required documentation must be received by CalSTRS before you start working. CalSTRS will send written notice within 30-calendar days of receipt of the required exemption request documentation to inform both the employer and the member whether the retired member activities to be performed will be subject to or exempt from the separation-from-service requirement.

If you have not yet received written notice, make sure to check with CalSTRS or your employer to see if you have been approved for the exemption before you begin working to avoid having your retirement benefit reduced by excess earnings.

Also, note that an approved exemption only exempts your earnings from the 180-calendar day separation-from-service requirement. Any earnings during the 180-calendar day period are still subject to the annual postretirement earnings limit.

The provisions of SB 765 are effective from July 1, 2024, to June 30, 2026. After June 30, 2026, the law will revert to existing law in effect prior to July 1, 2024.

You can find more information on the working after retirement webpage and the Working After Retirement fact sheet. CalSTRS also publishes a Pension Sense blog, and the latest blog is about SB 765, which can found here.

Please read the employer directive, which provides details pertaining to the exemption requirements that employers must follow.