Terminating the Employment Relationship

not eligible or selected for the program.”

e. PEPRA Requirements The PEPRA requires a 180 day break in service period before a retired annuitant, who retires pursuant to accepting an early retirement incentive, can return to work for a PERS agency (or an agency with a reciprocal retirement system with PERS) without reinstatement into PERS. 314 In addition, it appears that the PEPRA prohibits early retirement incentives structured as supplemental defined benefit plans that provide for a defined benefit payout over time. 315 If your agency intends on providing an early retirement incentive, we advise that your agency consults with legal counsel to ensure that it complies with the PEPRA.

An employer may not condition the receipt of an early retirement incentive on an employee’s agreement to waive unemployment insurance benefits.

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2. “G OLDEN H ANDSHAKE ” F OR PERS A GENCIES Agencies contracting with PERS may choose to offer, in the face of impending layoffs, immediate retirement and a purchase of two additional years of service credit for eligible employees. This is commonly referred to as a “PERS Golden Handshake.” 316 The benefit to the agency is the reduction of long-term staffing levels as a cost-saving measure. The benefit to the employee is to retire early, but with the benefit of having two more years of service credit without having actually worked those years. This is typically an attractive option for employees who intend to retire within the next five years, but are continuing to work to obtain one or more years of service credit toward their retirement benefit. The agency is also able to spread out its own cost of the purchased service credit over several years. However, PERS strictly limits the circumstances in which Golden Handshakes may be offered and the procedures that must be followed. First, the agency must determine that it is facing an “impending curtailment of, or change in the manner of performing service.” 317 That is, the agency must determine that they will be reducing staffing levels or substantially reorganizing personnel via transfers or demotions. Second, the agency will need to designate one or more job cla ssifications, departments, or “other organizational units” that is facing impending layoffs, transfers, or demotions, such that those job classifications, departments or other organizational units will be offered Golden Handshakes. However, Golden Handshakes cannot be provided on the basis of employee organization or non represented groups. In other words, the agency cannot simply state that it will offer Golden Handshakes to all employees in the agency who qualify or to only members of SEIU. The intent of the statute is to only offer Golden Handshakes to employees in classifications which might otherwise suffer layoff, transfer or demotion because of curtailment of the public agency’s services or a change in the manner of performing service.

Terminating the Employment Relationship ©2022 (s) Liebert Cassidy Whitmore 90