CalPERS, the California state employee retirement program, has suspended its practice of hiring salaried employees for second jobs within the agency, it has announced.
The agency may process retirement applications more slowly as a result, it said in a news release on Friday.
The announcement came after the Sacramento Bee published an article about the practice, and Assemblymembers John A. Pérez (D-Los Angeles) and Rob Bonta (D-Oakland) said they would investigate. Pérez is speaker of the Assembly and Bonta is chair of the Public Employees, Retirement and Social Security Committee.
CalPERS estimated that it had saved $1.6 million by hiring current employees to test its new computer system and work on a backlog of other tasks. It calculated this figure by subtracting its estimated cost for hiring and training additional workers to do the job from what it paid the existing employees.
But it said it was stopping the practice because of the controversy:
It is now obvious that there are various interpretations of the use of Additional Appointments across all state departments. Most importantly, we recognize that the media has sensationalized this practice and it has now become a significant distraction for policy makers and our own employees from the important business of serving California. Therefore, effective tomorrow (January, 19, 2013), CalPERS is suspending the use of all Additional Appointments until the California Department of Human Resources (CalHR) and the State Personnel Board (SPB) can provide further clarification on this policy that has been in place under six governors’ administrations since 1979. CalPERS intends to get back to the business of serving California’s public employees.
Although CalPERS always planned to phase out the use of these positions by the end of the fiscal year in June, CalPERS is suspending their use now because we value most the trust of our members, stakeholders and the public. The suspension today will affect primarily the speed of processing retirement applications and service credit purchases.
Although state regulations included provisions for hiring employees for more than one job, critics have questioned whether the rules apply to salaried, as opposed to hourly, employees.
In their own statement, Assemblymembers Bonta and Pérez suggested the work might have gone to people who are not already fully employed:
During a time when many Californians are out of work and many state workers have been required to take furloughs, it is disturbing to learn that some CalPERS managers were paid additional wages potentially outside of state personnel policy. While we understand the urgency involving the delivery of CalPERS’ new computer system, we need to look at a better way of handling the extra work. The Assembly Committee on Public Employees, Retirement and Social Security will be looking further into this matter.