Effective January 1, 2020, the
Work After Retirement section of Senate Bill 1049 relaxes most existing restrictions on retirees working after retirement. This allows most retirees to work unlimited hours for a PERS-participating employer, while continuing to receive their retirement benefits (without accruing any new benefits), in calendar years 2020 through 2024.
The bill also requires employers to pay
employer rate contributions on PERS retirees' salaries as if they were active members, excluding IAP (6%) contributions. Working retirees remain in the PERS membership plan they were in when they retired (i.e., Tier One, Tier Two, or OPSRP).
Who can work unlimited hours
- PERS members who retire at
full retirement age may work
hours and still receive their PERS retirement benefits.
- PERS retirees who choose to
stop their retirement and return to work as an active member no longer receive their PERS retirement benefits and may work
- PERS members who
retire early may work
only if they do not work for any PERS-participating employers for at least six months after their PERS effective retirement date.
Who can work limited hours
Tier One/Tier Two early retirees with no six-month break may work up to 1,039.99 hours/year and still receive their benefits. If they surpass that number (of if they are hired into a qualifying position), they become an active PERS member, their retirement benefits cease, and they may have to pay back some of their pension.
OPSRP early retirees with no six-month break may work up to 599.99 hours/year and still receive their benefits. If they surpass that number (or if they are hired into a qualifying position), they become an active PERS member, their retirement benefits cease, and they may have to pay back some of their pension.
Retirees who are not eligible to work unlimited hours under SB 1049 may be able to work under one of the
exceptions that were available prior to SB 1049. These exceptions are not eligible to OPSRP members.
You may have other limitations on the number of hours your retirees can work. Any decision on terms of employment is between you and your employees.
Social Security Exceptions to the 1,040-Hour Rule
Tier One or Tier Two retirees who have reached full retirement age under Social Security may work an unlimited number of hours. Remember that full retirement age under Social Security varies by birth date.
Tier One or Tier Two retirees who are receiving Social Security benefits and have not reached full retirement age under Social Security may work either:
- Less than 1,040 hours in a calendar year
- A total number of hours, at the retiree's hourly rate of pay, that does not exceed the annual earnings limit set by the Social Security Administration.
The Social Security Administration annually establishes the calendar year earnings limits for recipients of Social Security benefits. Annual changes to earnings limits established by the Social Security Administration are not effective for Tier One or Tier Two retirees until PERS amends its administrative rule that specifies the limits. The following limits are in place:
- For retired members who have not reached full retirement age under the Social Security Act, the annual compensation limit is $19,560 for 2022.
- For the calendar year in which the retired member reaches full retirement age under the Social Security Act and only for compensation for the months before reaching full retirement age, the annual compensation limit is $51,960 for 2022.
For more information, go to Social Security Receiving Benefits While Working webpage.
Paying contributions on working retirees
Wages for PERS retirees working after retirement are subject to the same
employer contribution rates as if they were active employees. (To learn about your rate, read
Guide to Understanding Your Rate.)
Working retirees do not contribute to their IAP account; therefore, employers
do not make IAP (6%) payments for PERS retirees. To verify your current employer rate, go to the
Employer Contribution Rates webpage.
Choosing the right Detail 1 – Member Demographics new-hire status code
When selecting a status code for the retiree's DTL1 new-hire record, use the same determination that you would have used prior to SB 1049.
11 – Retiree New Hire with Hour Limit (most common).
12 – Retiree New Hire w/o Hour Limit.
13 – New Hire – Retiree return to service (only use for a retiree who is pausing their retirement benefits and returning to qualifying work).
Work After Retirement wage codes
To comply with SB 1049, PERS updated the wage codes used to report retiree hours in EDX.
|07||Retired/No Contributions||Used to report service retiree wages prior to 1-1-2020 and disability retired members returning to work.|
|14||Negative Adjustment/No Contributions||Used to negatively adjust retiree wages reported as 07.|
|17||Retiree Wage - ER Rate||Used to report a service retiree who has a pay date of 1-1-2020 or later.|
|18||Negative Adjustment Retiree Wage-ER Rate||Used to negatively adjust Retiree Wage-ER Rate wages for a service retiree who has a pay date of 1-1-2020 or later.|