Retired teachers using Early Retirement Factors (ERFs) can substitute teach beginning June 10

Posted 09-Jun-2016

Teachers’ Retirement System (TRS) Plans 2 and 3 teachers who retired using the 2008 Early Retirement Factors (ERFs) will be able to return to work as substitute K-12 teachers for up to 867 hours per calendar year without having their benefits suspended under a new law (SB 6455) that takes effect this month. This change will be in effect from June 10, 2016, through July 31, 2020.

If you are a teacher who retired using the 2008 ERFs, keep the following rules in mind so you continue to receive your monthly pension benefit while working:

  • Your employer must pay a compensation rate for substitutes that is at least 85% of the full daily state rate.
  • You must reenter employment on or after June 10, 2016.
  • You must wait at least one calendar month between your retirement and returning to work.
  • You must work only as a K-12 substitute teacher. This means working as a substitute coach, nurse, office-support person or administrator, even for just an hour, will suspend your benefit.
  • Training, orientation and classroom preparation time all count as returning to work.

If you have retired from more than one retirement system that the Department of Retirement Systems covers or have a disability retirement, contact DRS to discuss eligibility.

For more information, read the brochure Thinking About Working After Retirement? and these frequently asked questions:

What are the 2008 Early Retirement Factor (ERF) return-to-work rules normally?

If you retire using the 2008 ERFs and are younger than age 65, you cannot work in any capacity for a DRS-covered employer and continue to receive a benefit. If you do return to work, you will not receive your monthly benefit for any month in which you work. Your benefit will restart the first of the month after you stop working. Once you reach age 65, your 2008 ERF restrictions lift and you are subject to the same return-to-work rules as a retiree who didn’t use the 2008 ERF.

I retired from PERS or SERS using the 2008 Early Retirement Factors. Can I return to work as a substitute teacher without having my benefit suspended?

No. The new law applies to retired teachers only.

I retired from TRS using the 2008 Early Retirement Factors. Can I return to work as a substitute coach, administrator or office-support person?

No. To take advantage of this change, you can return to work only as a K-12 substitute teacher. If you choose to work in any other position, even briefly, your benefit will be suspended.

I retired from TRS using the 2008 Early Retirement Factors. Can I return to work as a substitute librarian?

Yes. Substitute librarians at K-12 public schools are considered substitute teachers.

For how long are the new rules in effect?

The new rules are in effect from June 10, 2016, through July 31, 2020.

What happens if I go over my hours?

You can work as many hours as you want in a calendar year. However, if you are employed as a K-12 substitute teacher and work more than the allowed 867 hours, your monthly benefit will be suspended. Your benefit will restart the first of the month after you stop working or when the new calendar year begins.

I am a 2008 ERF retiree. Can I return to work as an independent contractor with the school without losing my benefit?

No. You cannot earn compensation from a DRS-covered employer for services performed as an independent contractor and continue to receive a monthly benefit.

How are my hours counted?

All hours you work as a K-12 substitute teacher count toward your limit of 867 hours. Any hours worked outside of that scope will suspend your benefit.

I took the 3 percent ERF. How do these changes affect me?

These changes don’t affect you. You can work up to 867 hours in an eligible position each calendar year and continue to receive a monthly benefit. If you work more than 867 hours, your monthly benefit will be suspended until you quit working or the next calendar year begins. This opportunity to work 867 hours without a suspension of benefits doesn’t end for you as does the temporary exemption for the 2008 ERF recipients.

Can I return to work or training for work before June 10, 2016, and not have my benefit suspended?

No, you must reenter employment on or after June 10, 2016. Your employment includes any orientation, training or preparation time. You must also wait 30 consecutive days after your retirement date before returning to work as a retiree.

What should I do when I return to work?

When you return to work as a K-12 substitute teacher, tell your employer you are a retiree who chose the 2008 ERF. If your employer doesn't know you are retired, you could be reported incorrectly. That might stop your benefit or cause us to pay you when we shouldn’t, which you would need to repay.

I am a 2008 ERF retiree and am going to turn 65 during the next school year. What should I expect?

Before you turn age 65, you are limited to 867 hours working as a substitute teacher in a calendar year.

Once you turn 65, the normal retiree-return-to-work rules apply. If your position is categorized as “eligible,” such as an administrator or contracted teacher, you can work up to 867 hours in any DRS-covered position. If your position is categorized as “ineligible,” such as a substitute teacher or bus driver, you can work an unlimited number of hours.

For example, if you work as a substitute coach before you turn age 65, your benefit will be suspended. Once you turn age 65, you can coach and keep your benefit.

How many hours do I have reported already?

Your employer tells DRS how many hours you work in which capacities. Please contact your employer for that information.

I am a dual member retiree. Can I return to work as a substitute teacher without my benefits being suspended?

It depends on the choices you made at retirement. Each system works independently. This legislation only impacts your TRS retirement. Your other retirement’s rules haven’t changed.

For example, if you’re a PERS 2 and TRS 2 retiree and took the 2008 ERF for both plans and you return to work as a substitute teacher, your PERS 2 monthly benefit will be suspended. Your TRS 2 benefit won’t be.

Which hours count toward the annual limit?

All hours for which you receive compensation count toward the annual limit. This includes paid holidays or compensatory time, sick leave, and annual leave taken in place of normal work hours. Sick leave or annual leave that is cashed out at the end of an employment period doesn’t count toward the limit. Cashed out compensatory time does count toward the limit.

Will working for more than one school district at a time affect my benefit?

No. The 867-hour limit will be applied to the total hours you work as a substitute regardless of which school districts you work for. However, if you work as a substitute teacher in one district and a substitute coach in another, working as a coach will suspend your entire month’s benefit.