How will re-employment affect the monthly retirement benefit that you are receiving from the Department of the State Treasurer? Read below to find out...
Employment with an employer that does not participate in the Retirement System
If you are receiving early or service retirement benefits and you become employed with any employer that does not participate in the Retirement System from which you retired (except the Consolidated Judicial System and Legislative Retirement System), your new earnings will not affect your retirement benefits.
Employment with an employer that participates in the Retirement System
If you return to employment with an employer that does participate in the Retirement System from which you retired, the following information applies after October 1, 2005:
A six month period during which no service is rendered to an employer in the Teachers' and State Employees' Retirement System (TSERS) must immediately precede a return to employment. A return to work earlier than six months will revoke your retirement benefit retroactively to your retirement date and all benefits paid to you must be repaid to the Retirement System. Establishing a pre-existing agreement for post-retirement employment with an employer in TSERS is prohibited and could cause retroactive revocation of retirement benefits, as well.
If you are reemployed after six months from your retirement date for a TSERS-covered employer in a position not eligible for participation in TSERS, you will be subject to earnings restrictions of 50% of your gross 12-month pre-retirement salary (excluding termination payments) or $26,960.00, whichever is higher. The dollar figure is adjusted annually according to the Consumer Price Index, which is a national measure of increase in the cost of living from one year to the next. These earnings restrictions apply for the 12 months immediately following retirement and for each calendar year following the year of retirement.
If you exceed your earnings limitations, your retirement benefit will be suspended the first day of the month following the month in which you exceed the limit for the remainder of the calendar year. Your retirement payment will start again on January 1 of the year after your benefit is stopped. If your earnings exceed the allowable amount in the month of December, your benefit will not be suspended.
re-employment which causes suspension of your retirement allowance will also cause the suspension of your health coverage under the retiree group of the State Health Plan. Before accepting such re-employment, you should ask the new employer if you will qualify for continued coverage under the active group of the State Health Plan, and if you will qualify for the State's contribution toward your coverage. Upon restoration of your retirement allowance, your health coverage under the retiree group will be reinstated the first of the month following the month your retirement allowance is restored.
You may return to work for a TSERS-covered employer in a permanent full-time position after a six-month break, but your retirement benefit will be suspended and you must enroll in TSERS as an active employee. If you return to service and contribute for at least three additional years, your service from your first and second periods of employment will be combined at the time of your second retirement, and you can change the retirement payment plan and/or beneficiary you selected at the time of your original retirement. If you return to service for less than three years, your first retirement benefit will be reinstated and you will have a choice of either receiving a lump sum refund of contributions or another (generally smaller) monthly benefit from your second period of employment.
Re-employment exception for classroom teachers:
You may return to work as a teacher and be exempt from the earnings restrictions if you retired after October 1, 2005, but on or before October 1, 2007, or if you retired after October 1, 2007, with an unreduced benefit, under the TSERS and return to teach in a permanent position at more than 50% time after a six-month break during which no service is rendered to a TSERS employer immediately preceding your return to employment. A return to work earlier than six months will revoke your retirement benefit retroactively to your retirement date and all benefits paid to you must be repaid to the Retirement System. Activities such as substitute teaching and part-time tutoring are NOT permitted during the six month period. Establishing a pre-existing agreement for post-retirement employment with an employer in the Teachers' and State Employees' Retirement System is prohibited and could cause retroactive revocation of retirement benefits, as well.
Under this special exception, the teacher's employer must contribute 11.7% of the teacher's salary to TSERS. The earnings cap exemption for teachers meeting these requirements expires on October 1, 2009, unless further legislative action is taken.