PPL Inc: Community College Leadership Services



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PUBLIC EMPLOYEES WORKING AFTER RETIREMENT IN CALIFORNIA

PPL has been helping retirees to find community college employment as interim administrators and consultants since 1978. PPL has been the leading company in this type of employment, facilitating the process for retirees and employing districts, identifying candidates and assisting in their placement, or providing billing and payroll services for consultants.

Many retirees start consulting businesses on their own, some incorporating to do business in California. This may work for you. However, there are existing consulting agencies such as PPL that offer some advantages to those who want to consult or serve as interims. PPL will provide the following services to its associates.

For its interim administrators and consultants, PPL will:

• Market your skills to the California Community Colleges.

• PPL will obtain evaluations on your services and provide feedback to you.

For its consultants, PPL will: negotiate the contract and finalize the arrangements for you consulting services.

• Serve as a billing and payroll service to facilitate your having the time to consult.

• Maintain pay records on you and prepare a 1099 form at the end of the year for tax purposes when working as a consultant.

• Advise you about liability insurance on your work.

• There is no fee for this service to the consultant; we bill the District for the placement service.

• While PPL would appreciate your working through our company, PPL encourages you to work on your own or with other clients to maintain your Independent Contractor status.

• PPL serves as a third-party administrator on your contract so you will not be listed directly on the districts books where an employee relationship might be implied.

Consultant Assignments

A retiree working as a consultant has no earning restrictions under CalSTRS or CalPERS, However, the consultant’s work cannot be in a position identified as CalSTRS or CalPERS creditable service. (Positions recognized by the district as CalSTRS or CalPERS eligible employment.) One cannot avoid this rule by simply working in such a position as a consultant, an independent contractor, or by working through a third-party contractor

Consultants differ from interim assignments, because you are not an employee of the district, but serve as an independent contractor. Such assignments must be performed within the context and guidelines of the Internal Revenue Service for independent contractors. Work must not be done in creditable service positions under CalSTRS or CalPERS.

Generally, these assignments are defined by a scope of work plan that provides for the services that will be performed by the consultant. Consultants can have a working relationship with the staff and constituency of the college, but cannot provide direct supervisory services, be a signatory, or serve as an agent for the college. When PPL prepares the contract for the consultant, an appendix will be added that will provide for the scope of work with activities and product that will be prepared by the consultant.

CalSTRS suggests working through a third-party contractor and indicates that the assignments should be a year or less. When you are working through a third-party contractor your name does not appear on the payroll of the district because you will be paid through the third-party contractor. It is suggested that you have a short break in service between contracts to meet this requirement and IRS restrictions on independent contractors.

If you are employed as an independent contractor, you should have your own personal email as well as your own cell phone, not ones that are provided by the District. Many of our independent contractors have business cards printed, and underneath their names it merely says: “consultant” and list his/her cell phone.

Complying with the law on tax issues can deplete a lot of what you thought were going to be your earnings. A new state law on misclassifying employees as independent contractors went into effect on January 1, 2012. It can bring about a large fine for violations and PPL is diligent in working with you to maintain your status as an independent contractor.

Consultants are independent contractors, unless they are working as an employee through some company and, thus, will be responsible for several tax responsibilities:

• Income Tax both federal and state

• Social Security Tax and you owe both sides of the tax

• Disability Tax

• Medicare Tax

• Workers Compensation

Remember, consultants are responsible for self-employment tax when filing an annual income tax return.

Interim Assignments

PPL has had a long working relationship with CalSTRS and CalPERS and was instrumental in getting the former waivers and exemptions that allowed CalSTRS retirees to do interim assignments. Our organization worked closely with ACCCA on the Pension Reform Act of 2013 to avoid the possibility of having all exemptions and waivers go away or be significantly reduced on June 30, of 2012. In addition, PPL contributed to the dialog with CalSTRS and CalPERS regarding conflicts in membership based on the creditable work being performed. That issue has been resolved with the passage of AB 963 and will not be a problem for members in the retirement system prior to July 1, 1990.

Retirees can work as interim employees in a position identified as STRS creditable service. Interim employees have more restrictions and these restrictions are explained below.

When you are working as an interim in a position identified as creditable STRS or PERS service, you will be an employee of the district and tax requirements will be handled by the employer. Based on your own tax status, you may have to work with the district to ensure that the income tax issues are addressed appropriately to cover your liability.

Some of the basic rules on working in public employment as an interim after retirement are listed below:

1. Employment Status.

As an interim administrator, you are an employee of the district, not of PPL. Nevertheless, PPL has a vital interest in your successful service. As the referring agent, PPL receives a placement fee for professional services, above and beyond your salary. This fee is not deducted from your salary. The District pays your salary and pays PPL the fee for your placement. This arrangement is codified by an agreement between the District and PPL.

Most districts do not provide health and dental coverage for interim employees. The District does not have to contribute to STRS on your behalf; however, you will probably have a payroll deduction for Social Security to cover Medicare, Worker’s Compensation and Disability fees. You may also be required to have a TB skin test. You should consult the District’s policies regarding vacation and holidays.

It is important for PPL to be aware of any changes in your employment status. If your starting or ending dates, salary, or assignment changes, PPL should be notified immediately.

2. STRS Earnings Limitation.

If you are retired under CalSTRS, it is important that you be aware of STRS earnings limitations when working in a position identified as STRS creditable service and how they apply to you in your current employment. The following options exist under current STRS legislation and rules:

Restricted Earnings

□ Between July 1, 2017 and June 30, 2018, you can earn up to $43,755 with no effect on your retirement allowance. (This figure is to be reviewed annually and is based on the average retirement income of all retirees in the system the previous year). An adjustment will be made in the maximum earnings starting July 1, 2017 to June 30, 2018 allowing you to earn $43,755.

□ A person working in an STRS creditable assignment may not work for any K-14 district employer as an interim for the first six months after retirement. There is a minor exemption if the retiree is working as a teacher’s aide.

□ Due to the passage of AB 963, it is anticipated that those retirees that worked in CalPERS eligible positions while retaining CalSTRS retirement membership will no longer be eligible to work in a CalPERS position in retirement.

Unrestricted Earnings

□ A STRS retiree from a public school or community college may not work in a PERS position, except for working for the California State University System or the State of California. This does not apply to a PERS retiree working in a STRS position.

□ A STRS retiree can return to CalSTRS and have no earning limits because they are a member of the system. However, you will not be receiving retirement pay. This may work for retirees that retired in the 80’s or 90’s who can benefit from a recalculation after completing the assignment and returning to the retirement system. New calculations for retirement will be based on the highest three years of creditable service. You will have to stay out of creditable service assignments as a retiree for 180 days when you return to the retirement system. Once you return to your retirement you cannot re-enter the retirement system for two years.

□ A STRS Retiree that is appointed as a Special Trustee by the Board of Governors of the California Community Colleges can be exempted from the earning limits during their service.

It is important that you check with STRS to ensure your status under one of the above provisions. You can call CalSTRS (916) 229-3525 for information about “emergency employment exemptions” You should also check with the District to confirm that it has received approval for an emergency vacancy exemption if you are working under that provision. Each district and county has different STRS and PERS contacts to deal with exceptions to the earning limits. The interim employee needs to work with the district and their counsel to ensure that their earnings are appropriate under the statute

There are some options for providing compensation over the earning limitations that are not considered to be creditable compensation. If, properly arranged, housing, travel costs and other living costs can be arranged so they are not part of your salary. At one-time annuities were not considered part of compensation. However, that has been changed and any annuities provided by the district will be computed as part of your compensation. PPL advises its clients to work with district counsel and to clear agreements with STRS to ensure that they are complying with all provisions of the STRS statute.

3. PERS Earning Limitations

If you are a CalPERS retiree, PERS is a little less restrictive than STRS. The basic rule is that you can work 960 hours a year based on the fiscal year, July 1 to June 30. You can still earn whatever the regular position will pay on that basis. The work hours can be determined between the employer and the employee, so there is a lot of flexibility regarding how this is allocated. If you work regular hours and days, this will amount to 120 days, but you could spread those days over many months. There are adjustments in the calculations of your salary defined by the CalPERS retirement System. You are advised to review these restrictions with CalPERS or the employing district.

There are waivers under PERS that will allow you to work over the 960 hours, but it has primarily been used in city and county government and is harder to get approved. There was legislation to eliminate the waivers, but it was not enacted so waivers provision probably will not change soon.

PERS retirees have fewer restrictions in working in other retirement systems. Unlike a STRS retiree, who cannot work in PERS that same restriction does not apply in PERS. The only caveat that needs to be addressed is where a retiree does a coordinated or blended retirement from both systems. That may provide you with opportunities to work in either retirement system in retirement, unlike individuals retiring from one system or the other separately.

There are five different groups under PERS. Generally, these assignments are limited to one year. There are no restrictions under PERS currently, if you are working in a position considered creditable service in another retirement system. The restriction for STRS is codified in the Education Code and not in the retirement statutes.

4. Web Sites and E-Mail

Web sites and e-mail are every day tools for administrators as important informational and communication sources. If you are an interim, it is important for you to obtain an e-mail address at the college upon your arrival.

Here are some web sites that you may find helpful:

□ cco.edu - This is the Chancellor’s Office web site and includes a “What’s New” page and the Chancellor’s e-mail which updates colleges on state affairs.

□ www@ - This is the ACCCA web site that includes information about ACCCA activities but also provides links to other community college web sites. Retaining membership as an ACCCA Retiree provides you with liability insurance while working in an educational institution.

□ calstrs. - This is the STRS web site that provides information on retirement legislation and related matters

□ leginfo. - You can look up state and government codes, including the Education Code on this site.

□ - This is the Community College Foundation web site and provides links to other community college sites as well as good deals on computer and computer related purchases

□ - This is the Community College League of California web site that includes information about its activities as well as links to other sites.

5. Professional Personnel Leasing

PPL maintains a web page with a wealth of information about our services and includes names and addresses of its officers and directors. You can access this information at PPL would welcome you to consider working through PPL as an Associate. You can complete an application that will place all your needed information in the PPL client database by going to and clicking on the “Join Our Team” tab and clicking on the green Application Form. A template will pop up and you can complete an application. Be sure to click on the Categories box and select as many of these categories as you feel apply to you. PPL would also appreciate you attaching your resume and a picture. If you have any questions Call Donald F. Averill at (909) 553-6085 or email him at daverill@ and he will work with you to get you on our list of associates.

PPL does not prohibit its associates for working on their own or with other companies, but we would appreciate it if you will work with us as your first source of job opportunities.

□ Keep us posted on any changes in your address, phone, e-mail, interests, or availability

□ Notify us of any potential job opportunities which we might develop

□ When contacted by a district ask them to contact PPL we would encourage you to let them know you work through PPL Inc.

□ Suggest ways in which we can market your skills

We hope you will consider joining the PPL Team

Donald F. Averill, Ed.D.

Owner Emeritus and Webpage Administrator,

PPL Inc. 091117

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