Working After Retirement for an ASRS Employer: When is ACR due?

One of the steps ASRS retirees are required to complete when they return to work (RTW) for an ASRS employer is the Working After Retirement smart form, also sometimes referred to as the RTW form, through their myASRS secure account within 30 days of returning to work. This requirement is outlined in Arizona Administrative Code (A.A.C.) R2-8-117 (B).

New retirees that return to work immediately may still have their status as “Retirement in Process,” which employers can confirm by using the Check Member Eligibility tool. This is important to be aware of because the Working After Retirement option is not available to new retirees under the Apply Now section until their retirement has been finalized as it typically takes 45-90 days from the date of retirement to be finalized. 

Prior to retirement being finalized, ASRS members will find the Working after Retirement option in the Your Account section of their secure account. This tool allows members to evaluate whether or not returning to work for an ASRS employer will allow them to remain retired and continue to receive a pension, or if the intent of their employment would violate RTW rules that will cause their pension to be suspended. 

What if a retiree elects to suspend their benefit?

Now let’s talk about what to do when the RTW form has been submitted to and approved by the employer for a retiree who wants to suspend their pension and resume actively contributing again. In this case, we will assume this RTW retiree has accepted a position that meets the 20/20 Membership Criteria and they are not yet subject to the Required Minimum Distribution criteria of the Internal Revenue Code: 401(a)(9)(c).

If, for example, the retiree returned to work for an ASRS employer on June 27, 2023, and submitted the RTW form to their employer on July 15, 2023, and their employer approved and submitted the RTW form on July 24, 2023. What contributions are owed to ASRS? Before we answer that, here are a few reminders: 

  1. Retired members cannot contribute to the ASRS and receive a pension at the same time. 
  2. Employers of RTW retirees will either pay contributions at the Alternate Contribution Rate (ACR) or the regular retirement contribution rate but not both. 

For this RTW retiree, ACR is required to be remitted for all pay period ending dates between June 27, 2023 and July 31, 2023. Why is that? Even though the employee and the employer followed the rules of completing the RTW forms and submitting them in a timely manner, the retiree will still be getting a pension payment on August 1, 2023. This is because July 24, 2023, was the date that ASRS became aware that the retiree has returned to work and elected to suspend their pension. The ASRS has monthly cutoff dates to make changes to the following month’s pension payroll. That cutoff date is usually around the 20th of every month. In July, the cutoff for pension payroll was on July 21, 2023. So this retiree will still be receiving their pension for August on the first of the month. 

However, since the notice was received on July 24, 2023, the retiree’s pension will be suspended effective August 1, 2023. The pension will always be suspended on the 1st of the month following the month of notification. That means, the retiree will be able to resume active contributions as of the first pay period that ends on or after August 1, 2023. However, because a retiree cannot be retired and contribute in the same month, the August 1, 2023 pension must be returned to the ASRS. The retiree will receive a notice of overpayment to pay back the pension paid. 

For more information on hiring retired workers or the ACR, visit Hiring Retired Workers and our Alternate Contribution Rate webpages.

Written by Aaron Bernardino, Employer Relations

Published August 2023

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