(Working retiree limits apply only to retirees of the Defined Benefit Retirement Plan. Defined Contribution Plan members who retire and go back to work in a PERS-covered position are required to stop any distributions and contribute to PERS while employed.)
As a PERS Defined Benefit (DB) Plan retiree, you can return to work in a position covered by your same retirement system but only in a limited capacity without affecting your retirement.
If you do wish to return to work as a retiree, the law imposes the following limits:
- You must sever employment and have been paid all compensation owed to you.
- You must have received at least one month of retirement benefits.
- You cannot have a verbal or written agreement that you will be returning to work.
There are additional limitations to working in employment for specific retirement systems:
PERS DB - You must terminate service for at least 90 days before returning to work under covered employment.
For PERS DB retirees less than age 65, and work in PERS covered employment in excess of 960 hours, your benefit will be reduced $1.00 for each $1.00 earned from PERS covered employment and any other concurrent non-PERS covered employment with the same employer. The limit applies to each calendar year. MPERA reduces benefits only if you exceed the limit.
For PERS DB retirees who are age 65 to 70 1/2 years of age - the limit is either 960 hours or an earning limitation, whichever is higher. The earning limitation is equal to your HAC adjusted for inflation. The sum of your retirement benefit and all PERS-associated earnings must be less than the earnings limitations (HAC adjusted for inflation). Earnings from other sources will not apply to the limit. Both limits apply to a single calendar year and we only reduce benefits for those years that your hours or earnings exceed the limit. Your benefit will be reduced $1.00 for each $1.00 earned from employment exceeding the limit.
For PERS DB retirees over the age of 70 1/2 - there are no limits restricting the earnings or hours of retired members.
The above limits apply only to PERS retirees working in PERS-covered employment. PERS-covered employment includes most positions with the state, university system, local governments, and school districts. If you are a PERS retiree, ask potential employers if the position you are considering would be covered by PERS. Covered positions include work performed for a PERS participating employer by a PERS retiree through a professional employer arrangement, an employee leasing arrangement, a temporary service contractor or as an independent contractor. If a PERS retiree returns as an independent contractor to what would otherwise be PERS-covered employment, general contractor overhead costs are excluded from PERS working retiree limits.
Any retiree working in a PERS covered job may at any time choose to stop retirement and become an active member of PERS again.
PERS members with an initial retirement date before 1/1/16 who return to active service receive a recalculated benefit if they work at least 2 more years. Otherwise, they are refunded their member contributions.
PERS members with an initial retirement date on or after 1/1/16 who return to active service for at least 5 years receive their initial benefit plus a benefit based on the new service.
JRS - A retired judge is entitled to receive compensation in an amount equal to the daily salary then applicable to the position up to a total of 180 days in a calendar year. This amount will be limited after 180 days.
HPORS, MPORS, GWPORS, SRS and FURS
Applies to members who return on or after July 1, 2017 to retirement system-covered employment.
- Members who return for less than 480 hours in a calendar year:
- may not become an active member in the system; and
- are subject to a $1 reduction in their retirement benefit for each $3 earned in excess of $5,000 in the calendar year;
- Members who return for 480 or more hours in a calendar year:
- must become an active member of the system;
- will stop receiving a retirement benefit from the system; and
- will be eligible for a second retirement benefit if they earn 5 or more years of service credit through their second employment.
- Employee, employer and state contributions apply as follows:
- employer contributions and state contributions must be paid on all working retirees; and
- employee contributions must be paid on working retirees who return to covered employment for 480 or more hours in a calendar year.
Second Retirement Benefit
- Applies to members who return on or after July 1, 2017 to an MPERA administered retirement system - covered active service.
- Members who work more than 480 hours in a calendar year and accumulate less than 5 years of service before terminating again:
- are not awarded service credit for the period of reemployment;
- are refunded the accumulated contributions associated with the period of reemployment;
- starting the first month following termination of service, receive the same retirement benefit previously paid to the member; and
- do not accrue post-retirement benefit adjustments during the term of reemployment but receive a GABA in January immediately following termination of service.
If you have any questions regarding working as a retiree, please contact our office and we will be happy to help.