Last Updated: June 2006
This publication describes the possible impacts on your retirement benefit if you return to work for an employer covered by one of the Washington State retirement systems. You can return to work for an employer not covered by a Washington State retirement system without impacting your retirement benefit, unless you are a disability retiree.
You must first retire before you can be covered under the return to work laws. You become a retiree when you do all of the following:
Taking these actions will establish your effective retirement date as the first day of the month following the month in which you left employment.
You must wait at least 30 calendar days after your effective retirement date before returning to work. If you return to work for a DRS-covered employer less than 30 days after your effective retirement date, your benefit will be reduced by 5.5 percent for every eight hours worked in a month up to a maximum of 160 hours. If the reduction is more than your benefit, the excess is taken from the next month’s benefit payment. The reduction continues until you stop working for a full 30 days.
If you terminate employment and file a retirement application but return to work before your effective retirement date, your application for retirement will be canceled. Because you are not considered retired, you will return to active membership and be required to pay member contributions.
When you return to work for a DRS-covered employer, it is important to let your employer know you are a retiree. If your employer does not know you are retired, you may be reported as an active member – which may stop your benefit. Contact your employer to determine the eligibility of your position.
If you wait at least 30 calendar days after your effective retirement date and return to work in a PSERS-eligible position your benefit will be suspended beginning the day you return to work.
If you wait at least 30 calendar days after your effective retirement date and return to work in a Public Employees’ Retirement System (PERS)-, School Employees’ Retirement System (SERS)-, or Teachers’ Retirement System (TRS)-eligible position, you can work up to the annual limit of 867 hours in a calendar year before your benefit will be suspended.
If you return to work in a Law Enforcement Officers’ and Fire Fighters’ or Washington State Patrol Retirement System-eligible position, please contact DRS.
If you return to work in a position that is ineligible for DRS membership, there is no limit placed on your employment. You can work in this position as long as it is classified as ineligible and still receive your full retirement benefit. However, disability retirement benefits may be affected by employment in a position that is ineligible for DRS members
You can work as many hours as you wish in a calendar year. However, if you are employed in a PERS/SERS/TRS-eligible position and work over the allowed 867 hours, your retirement benefit will be suspended for the remainder of the calendar year or until you terminate employment. In the month you exceed the limit, your benefit will be prorated. See example below.
Ellen retires effective January 1, 2007, and returns to work in a PERS-eligible position on February 1, 2007. She works for the remainder of the year. On July 11, 2007, she exceeds 867 hours of employment for the year. Her benefit will be suspended beginning July 12. She will receive a partial month’s benefit for July 1 through July 11. Ellen’s benefit will be restarted on January 1, 2008.
All hours for which you receive compensation count toward the annual limit. This includes paid holidays or compensatory time, sick leave or annual leave taken in lieu of normal work hours. Sick leave or annual leave that is cashed out at the end of an employment period does not count toward the limit. Cashed out compensatory time does count toward the limit.
If you are hired into a PSERS-eligible position, you can return to active membership. However, when you do so your benefit will stop. When you again retire, a new benefit will be calculated to reflect the additional service credit earned. If you have completed two or more years of uninterrupted service after going back to work, you may select a new benefit option.
If you are hired into a position that is eligible for other DRS membership, your retirement allowance may be impacted depending on the system and plan covered by the new position.
If you are a disability retiree, your benefit could be affected by returning to any kind of employment. Your return to work could mean that you are no longer disabled and therefore no longer eligible to receive a disability retirement. If you retired for disability and are considering returning to work, contact DRS.
A dual member retiree is someone who has combined service credit earned in more than one retirement system to qualify for retirement. If you retired as a dual member and are considering returning to work, contact DRS to determine the possible impacts on your benefit.
Under Washington state law, there are no limits on the amount of income you can earn. However, if you are receiving a Social Security benefit, returning to work may impact your Social Security income. To check income limitations under Social Security law, refer to the publication What You Need to Know When You Get Retirement or Survivors Benefits available on the Social Security Web site.
Overpayments and Underpayments: If you receive an overpayment of your retirement benefit, you will be required to repay the amount of the overpayment to DRS. If you receive an underpayment, DRS will correct the error and pay you the amount owed.
Deferred Compensation: If you are receiving payment from the Deferred Compensation Program (DCP), your payments will not be affected by your return to work. If you are not yet receiving payment and return to work, you can continue making contributions to the plan up to an annual maximum contribution amount, depending on your income. If you have questions, please contact DCP.
Health Care: If you retired from state government, a public education institution or a local government employer participating in the Public Employees Benefits Board (PEBB), you have the option to return to PEBB-sponsored coverage when you return to full retirement status. If you have questions about your health care coverage, please contact the Health Care Authority. If you retired from a local government employer, you will have to coordinate with your employer and health care provider to determine what you can do.
If you have questions about returning to work after retirement that are not covered in this publication, please contact DRS. Be prepared to provide your name, Social Security number, and retirement system and plan.
