CalPERS employers by now are well aware of the major changes in the Public Employees’ Retirement Law. On the heels of these changes and into the horizon, we have seen continuing efforts by CalPERS to audit contracting agencies.
Is Your Agency Ready?
If you’ve been following our blog, you know that this area of law is constantly evolving. We have provided useful blog articles on the key topics, including:
- The Public Employees’ Pension Reform Act of 2013 and beyond;
- CalPERS’ “new” regulations that redefined how employers must draft and maintain items of special compensation and payrate in order for both items to be included in as compensation earnable;
- Post-retirement employment, especially when it comes to “independent contractors;”
- Disability retirement processes and due process obligations;
- Change in employer contribution rates to CalPERS;
In addition to keeping you informed through the blog, we helped many of you review and audit your practices for compliance. If you’ve not done this, you may want to consider:
- Ensuring compliance now to avoid possible audits later.
- Negotiate changes with the employee organization to protect your agency in the event of any future audit.
We can also help appeal if you’ve had any negative determinations by CalPERS.
At some point, every public entity will find itself in the middle of a CalPERS audit. While never fun, this process does not have to be a painful one. We recommend that agencies obtain the services of a trusted advisor early. An advisor provides information on the process and what to expect, communicates with CalPERS’ auditors on your agency’s behalf, and assists in the information gathering process to comply with information requests.
The advisor must have experience with CalPERS audits, an understanding of the regulations and the nuances of the process, and how best to implement CalPERS’ items of improvement, not to mention the ability to assist in implementing the items of correction through labor negotiations and appealing any negative decision by CalPERS.
What Does a CalPERS Audit Look Like?
Generally, CalPERS comes to your agency, briefcase in hand, and spends several days looking at your practices and procedures. Following this audit period, CalPERS creates an audit report that they provide to the agency documenting areas of improvement. It can take months before receiving an audit report. More details on the CalPERS audit process can be found here.