CalPERS tells school employers vacation pay counts only when time off is taken; circular and phased start planned CalPERS officials clarified that vacation payouts are pensionable only when used to cover scheduled work time that the employee was excused from; lump‑sum cash‑outs and prorating vacation across non‑scheduled days are not reportable. Staff said a circular with examples is coming and compliance is expected to begin in fiscal year 2026–27.

CalPERS has just clarified that vacation pay counts towards pension only when it covers scheduled work time, leaving many employers to rethink their payroll practices.

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