Avoiding the Pitfalls of Returning to Work After Retirement

By Rosie Tomforde, Audit Officer

Many ASRS members who are retired or planning to retire have an interest in also returning to work while still receiving their well-deserved pension benefits. In most cases, this is permissible, but there are strict regulations when it comes to returning to work for an ASRS employer once you have retired.

The four simplest ways to Return to Work (RTW) without it affecting your pension are:

  1. Work for a non-ASRS employer.
  2. Work as a leased or contracted employee for an ASRS employer. The ASRS alternate contribution rate also applies.
  3. Work directly for an ASRS employer part-time, defined as less than 20 hours per week for any participating ASRS employer.
  4. Work directly for an ASRS employer for 20 or more hours per week after you have reached normal retirement status and at least 365 days have passed since your termination.

Common missteps many retirees make include:

    • Not terminating employment before retirement. Some members terminate, return to work, and then retire. That order is incorrect; it should be terminate, retire, then return to work. Other members decline to terminate because they plan to work part time, defined as less than 20 hours per week and/or less than 20 weeks a year. This is allowed; however, these members can never return to 20/20 employment until they have been terminated 365 days.
    • Returning to work too soon. Not everyone is aware that 12 months has been statutorily updated to 365 days. Also, some retirees have incorrectly concluded that working less than 20/20 means they can count out 365 days and then count back 19 weeks to return to full-time employment. This is not allowed. Just like a new, full-time employee starts membership on the first day of employment, a retiree returning to work cannot engage in 20/20 employment before reaching the 365 days after termination.
    • Returning to work 20/20 before reaching normal retirement. ASRS has early retirement options, but those early retirees are limited to working under 20/20 until they reach normal retirement. Someone who retires at age 50 with less than 10 years of service would have to wait 15 years until age 65.
    • Not completing the Return to Work Online Form. Members who return to 20/20 employment have always been required by statute to acknowledge, in writing, the conditions under which they are returning to work. Also, the ASRS is allowed to ask for any reports or paperwork needed to administer the ACR, so the Return to Work form is now required for retired members working less than 20/20, as well.
      • Return to work laws and regulations can be complex, so be sure to check with your employer and the ASRS before making any decisions that could jeopardize receiving your monthly benefit.
  • We have a section on our website devoted to Return to Work with much more information, including a short information video. Also, there is a Working After Retirement tool located in each member’s myASRS secure account to assist members and retirees in the process of determining return-to-work eligibility. 
  • This article first appeared in "Expanding Your Financial Horizons" (Q2, 2016), a digital publications of the ASRS.
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