by Stephen Crerand, Employer Relations
With retirement season comes a lot of questions about hiring employees who are returning to work as retirees.
If an employee is new to your organization, it is important to do some research in order to determine their ASRS eligibility or status. This helps you verify whether the employee is brand new to ASRS, an established member, or a Return to Work (RTW) retiree with ASRS.
If they are an RTW retiree, the member is required to complete the Working After Retirement smart form, also referred to as the RTW form, via their secure account within 30 days of their start date. There is no option to submit a paper RTW form. The online form will establish whether or not they have decided to return to work and continue to receive their ASRS pension or if they are suspending their pension in order to contribute again and earn additional service credit. In either case, a contribution of some sort will have to be reported to the ASRS.
If the RTW retiree has elected not to suspend their pension, the Alternate Contribution Rate (ACR) is required to be paid on their behalf regardless of their 20/20 status, direct/leasing/contracting arrangement, or whether the retiree satisfied the 12-month break in service without working in a leased or contracted arrangement. If the retiree has chosen to suspend their pension to return to work in a full-time or 20/20 criteria type of position, then the regular contribution and matching employer contribution will apply.
It is a known issue that new retirees will not have access to the Working After Retirement smart form until their retirement calculation has been finalized. As soon as they are notified that their retirement has been finalized, the retiree must submit the RTW form. ASRS employers then have 14 days to officially accept or reject a submitted RTW smart form.
Once satisfied with the form, the employer is then responsible for applying the appropriate type of contribution on behalf of the RTW retiree, either the ACR or active member contributions. In essence, during any employment period in which a retired ASRS member does not suspend their pension and resume active membership, the ACR is required to be paid by the ASRS employer.
Please note that any employees leased through a third-party provider such as Education Services, Inc. (ESI) who are also ASRS retirees are not required to complete the RTW form. The RTW form only applies to ASRS retirees returning directly as an employee of an ASRS employer.
Additionally, the ASRS employer is required to pay the ACR, and this cost cannot be passed on to the retired member in the form of a deduction from their pay. For more information on the ACR, visit the Alternate Contribution Rate webpage.
