Are you an employer who has vacancies to fill?
While the answer could be to hire retired ASRS members, do not forget that an Alternate Contribution Rate (ACR) is required should you choose to do so.
All ASRS employers are required to pay an ACR for all retired ASRS members who return to work in any capacity, are not actively contributing, and in any position that is similar in duties and responsibilities to that of a position ordinarily filled by an employee.
When an ASRS retiree returns to work for an ASRS employer and meets active membership criteria, then active contributions must begin and the member’s pension is suspended. At that point, the member will not receive a pension benefit until they either terminate employment or reduce their hours and re-retire.
However, there is an exception to this rule. Under very specific conditions, an ASRS retiree can qualify to remain retired while working for an ASRS employer. It is the responsibility of both the retiree and employer to ensure compliance. ARS § 38-766.01 allows all retirees who have terminated employment to return to work less than 20/20 membership criteria, employees hired to work at least 20 hours each week for at least 20 weeks in a fiscal year (July 1 - June 30) become active members of the ASRS, after retirement without suspending their pension.
A retiree’s pension will be suspended if any of the following conditions are met:
- Member did not reduce hours below 20/20
- Within the same fiscal year, before and after retirement, a member who returns to work must not equal or exceed 20 weeks of working 20-or-more-hour-weeks.
- Member meets or exceeds 20/20 in any fiscal year after retirement without having attained normal retirement and having been terminated from employment for at least 365 days
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If you have any additional questions about hiring ASRS retirees and ACR, please view our ACR Guide or send us a secure message with your questions.
