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Chapter 17: Hiring Retirees

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If you hire a retiree, different rules might apply to their eligibility for membership. If you have an employee who works for nine months but is paid over 12 months, you might need to take special steps to report their compensation. If you hire a substitute teacher or classified employee, you must use the substitute Type Codes.

Employer responsibilities

Employers are responsible for understanding the steps required to report special situations accurately.

Employing retirees

This section provides information about the special rules that apply to retirees of a Washington state retirement system who return to work for a DRS employer.

Reporting retirees returning to work

If you hire a DRS retiree as an employee, you must report their employment on the retirement transmittal report. Include DRS retirees on the transmittal report for the system applicable to the position in which they are working; do not report them for the system from which they are retired. You must indicate their employment begin date and type code for the position status as defined in each Washington state retirement system. When the position status changes for a retiree (ineligible to eligible or vice-versa), you must submit an end date for the previous position, along with a begin date and position type code for the new position. When they end employment, you must report the end date along with the appropriate type code.

If you fail to report the retiree’s employment, you will be liable for any pension overpayments made to them. In addition, if you report incorrect information that results in a retiree receiving a pension benefit in violation of the retirement rules, you are liable for any overpayment.

RCW 41.50.139 requires employers to obtain a form from all new employees indicating whether they have ever been retired from a Washington state retirement system. The information should be obtained each time an employee begins working for you. The Retirement Status Verification form can be used to document this information.

Retiree return-to-work rules contain many exceptions. Please use ERA Member Management or the reporting charts below to determine how to report retirees.

Retiree return-to-work reporting charts

Use the ERA Member Management process to determine if your new employee is a retiree of a DRS-administered plan. You can also use ERA Member Management to determine how to report the retiree, or you can use these quick reference charts.

Retired from:

Is the retiree returning to work at an institution of higher education? See this reporting chart.

Status code charts

Hiring retirees FAQ

Employers are encouraged to submit questions not answered here to Employer Support Services. For more information, refer to the DRS Employer Handbook.

How do I report an address change for retirees who return to work?

  • You can’t report an address change for retirees. Retirees must update their addresses in online account access. If you transmit a retiree’s address data in the member profile record, it will reject.

We’re hiring a retiree into an ineligible position. Do we have to report the retiree?

  • Yes. All retirees must be reported, even those working in ineligible positions; however, reporting compensation and hours for ineligible positions is optional.

We hired a retiree into an ineligible position in January. In March, the position changed from ineligible to eligible but ERA won’t let me choose the new type code. Why not?

  • You must first transmit an end date with the appropriate type code for the ineligible period. Next, report the new employment period with a start date and choose the eligible type code.

Why do I keep getting a missing earnings edit message?

  • Once you report a start date for a retiree in an eligible position, you must report the retiree each month until employment is terminated.
    • You must transmit one of these status codes:
      • Status code A with compensation and hours
      • Status code B if the retiree has no earnings for the month, but is still employed in an eligible position

What retiree hours are counted toward the maximum? Earned or compensated?

  • For eligible positions, compensated hours are counted. This includes paid holidays or when compensatory time, sick leave or annual leave is taken in place of normal work hours. Sick leave or annual leave cashed out at the end of an employment period doesn’t count toward the limit. Cashed out compensatory time counts toward the hour limit.

My state agency uses the PAY1 system. When I hire a retiree return to work (RRTW), whom do I contact to get the A.01 screen released to activate health insurance benefits?

  • The payroll/personnel staff hiring the RRTW must send a secure FUZE email to the Public Employees Benefits Board (PEBB) Outreach and Training (O&T) staff. O&T staff will respond to you typically within two business days. DRS doesn’t have the ability to release the A.01 screen.

Which plan do I report a retiree in?

  • Retirees must be reported on the applicable system’s transmittal report based on the position the retiree is working in and not the system the employee retired from.
  • Where can my retirees find the rules for returning to work?

Your employees can see retiree return-to-work rules and the plan page for their plan and system. They can also view a video or attend a live webinar.

Return to work rules vary by plan:

Plans

PERS 1
PERS 2
PERS 3
TRS 1
TRS 2
TRS 3
SERS 2
SERS 3
LEOFF 1
LEOFF 2
WSPRS 1
WSPRS 2
PSERS 2

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