Last Updated June 2016
This publication describes what could happen to your Public Employees’ Retirement System (PERS), School Employees’ Retirement System (SERS) or Teachers’ Retirement System Plan 2 or Plan 3 benefit if you return to work for an employer covered by one of the state retirement systems. You can return to work for an employer not covered by a Washington state retirement system without impacting your monthly benefit unless you are a disability retiree.
You must fully retire before you can be covered under return-to-work laws. To do so, you must:
Taking these actions will establish your effective retirement date as the first day of the month following the month in which you left employment.
Maria applies for retirement and terminates her employment Aug. 15, 2015. She meets the age and service requirements. Her effective retirement date is Sept. 1, 2015.
Quinn applied for retirement and terminated his employment July 15, 2014. He had enough service credit to meet the requirements for retirement. However, he did not meet the age requirement until July 15, 2015. His effective retirement date, therefore, was Aug. 1, 2015.
Before you return to work for a DRS-covered employer, tell the employer you are a retiree. If the employer doesn’t know you are retired, you could be reported as an active member, which might stop your benefit. Ask the employer about your eligibility for membership in a DRS or higher education retirement plan. If you have questions, contact DRS.
You must wait at least 30 consecutive days after your effective retirement date before returning to work.
If you return to work for a DRS-covered employer before 30 days have passed, your benefit will be reduced by 5.5 percent for:
If the reduction is more than your monthly benefit, the excess will be taken from the next month’s payment. The reduction will continue 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 will not be considered retired, you will return to active membership if you return to an eligible position, and you will be required to pay member contributions.
The rules that determine the number of hours you can work while continuing to receive your benefit depend on how you choose to retire.
Normal retirement or early retirement not using the 2008 Early Retirement Factors (ERFs):1 You will keep receiving your monthly benefit if you wait at least 30 consecutive days after your effective retirement date and work:
Early retirement using the 2008 ERFs:2 If you retire before age 65 using the 2008 ERFs, the rules are different:
If you are employed in a PERS-, SERS- or TRS-eligible position and work more than the allowed 867 hours, your monthly benefit will be suspended for the remainder of the calendar year or until you terminate your employment. In the month you exceed the limit, your benefit will be prorated.
Min retires effective Jan. 1, 2015, and returns to work in a PERS-eligible position Feb. 1, 2015. She works for the remainder of the year. On July 11, 2015, she exceeds 867 hours of employment for the calendar year. Her benefit is suspended beginning July 12, 2015. She receives a partial monthly benefit for July 1 through July 11. Min’s benefit restarts Jan. 1, 2016.
If you are a disability retiree, returning to any kind of employment could affect your monthly benefit. Your return to work could mean you are no longer disabled and, therefore, no longer eligible to receive a disability retirement. If you retired because of a 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, contact DRS to find out the impacts returning to work will have on your monthly benefit.
You are not required to return to PERS, SERS or TRS membership, but you may choose to do so if you are employed in an eligible position. If you retired from PERS, SERS or TRS with fewer than 15 years of service credit, you may become a contributing member of PERS; SERS; TRS; Law Enforcement Officers’ and Fire Fighters’ Retirement System (LEOFF); Public Safety Employees’ Retirement System (PSERS); or Seattle’s, Spokane’s or Tacoma’s first-class city retirement systems.
However, your PERS, SERS or TRS benefit could be stopped, pending termination of your employment.
Recalculating your benefit
If you return to active PERS, SERS or TRS membership, your future retirement could be impacted. If your retirement status is terminated because you return to membership, your monthly benefit will be recalculated when you reapply.
If you first retired early, the actuarial value of the monthly benefit you received might be assessed against your second retirement. Contact DRS for an estimate before resuming membership.
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.
Overpayments and underpayments: If you receive an overpayment of your monthly benefit, you will be required to repay it to DRS. If you receive an underpayment, DRS will correct the error and pay you the amount owed.
Health care: If you have 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, contact the Health Care Authority. If you have retired from employment with a local government, you will need to coordinate with your employer and health care provider to determine your health care options.
DCP: If you are receiving payment from the Deferred Compensation Program (DCP), returning to work won’t affect your payments. 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, contact DCP.
Contract work with a Washington state educational institution: If you are a TRS retiree, your employment status and rights differ from those of an active, tenured teacher. The duration of a return-to-work contract is limited to one year. However, a contract can be renewed each year at the discretion of your employer. For more information, contact the Office of the Superintendent of Public Instruction (OSPI).
If you have questions about returning to work after retirement that are not covered in this publication, contact DRS. Be prepared to provide your name, Social Security number, and retirement system and plan.