There are many reasons to return to work after service retirement and we understand that it is a personal choice. If you return to work for an employer that does not participate in the retirement plans PEBA administers, we wish you the best in your endeavor and you need not read any further. If you plan to return to work for an employer that does participate in the retirement plans we administer, this is called returning to covered employment and there are a few things you need to know about doing so.
Break-in-service requirement for SCRS and PORS service retirees
There is a break-in-service requirement for members who retired based on reaching service retirement eligibility requirements in SCRS or PORS. You must first have a complete, bona fide severance or termination of employment before you may return to work for an employer that participates in the retirement plans PEBA administers. After 30 days of retirement, you may be hired by a participating employer. For Class Two SCRS members, the Teacher and Employee Retention Incentive (TERI) program participation period counts toward the 30-day break requirement.
If you return to covered employment sooner than 30 consecutive calendar days after retirement, your monthly annuity will be suspended while you remain employed by a participating employer. If you are a TERI participant, a severance from employment is required at the end of your TERI participation period before you may receive your accumulated benefits or return to covered employment.
If you retire before you reach age 62 (SCRS) or 57 (PORS) and return to work with a participating employer, you will be subject to a $10,000 per year earnings limitation. This means you can earn up to $10,000 per year from covered employment and continue to receive your monthly annuity. If you continue covered employment and earn more than $10,000 in a calendar year, your monthly annuity will be suspended for the remainder of that year. The $10,000 earnings limitation applies regardless of your age when you return to covered employment. For example, you are an SCRS member who retires at age 58 with 30 years of service, and returns to work when you are 63 years old. You would still be subject to the $10,000 earnings limitation since you retired before you reached age 62. If you continue to work after earning $10,000 in a calendar year, your monthly annuity will be suspended for the remainder of that year.
The $10,000 earnings limitation from covered employment does not apply to you if you retired prior to January 2, 2013, or if you retired after age 62 (SCRS) or 57 (PORS). In addition, the limitation does not apply to you if you receive compensation for service as an elected official, service as an appointee of the Governor with confirmation by the South Carolina Senate, or service by appointment or election by the General Assembly.
Earnings limitation exemption for critical needs teachers
In certain circumstances, you may return to covered employment without affecting your monthly annuity if you are a certified teacher and are employed by a school district to teach in the classroom in your area of certification. The $10,000 earnings limitation does not apply if the State Department of Education determines that no qualified, non-retired member is available for employment in the position, and that a certified teacher is teaching in a critical academic need area or a geographic need area as defined by the State Board of Education, or that a retired certified school teacher or certified employee is employed in a school or school district that has received a “below average” or “unsatisfactory” academic performance rating pursuant to the Education Accountability Act. After approval is received from the Department of Education, school districts must notify PEBA of your exemption from the earnings limitation.
Earnings limitation information for SCRS and PORS members receiving a disability retirement annuity
If you are younger than age 65 and receiving an SCRS disability annuity or younger than age 55 and receiving a PORS disability annuity, you should report earnings from any gainful (public or private) employment to PEBA annually because there is an earnings limitation for all employment which is applied on a calendar-year basis. You may earn the difference between your inflation-adjusted average final compensation at retirement and your disability annuity without affecting receipt of your annuity.
PEBA will mail you a letter each February advising you of how much you can earn and requesting confirmation of your prior year’s earnings. You will have to repay any benefits that you received to which you were not entitled. If you earn more than the difference between your inflation-adjusted average final compensation and your disability annuity, your monthly annuity will be reduced or possibly canceled. If you return to work with an employer that participates in one of the retirement systems administered by PEBA and your annual earnable compensation is equal to or greater than your inflation-adjusted average final compensation, your disability annuity ceases and you must become an active member of the system. After age 65, an SCRS disability retiree is subject to the same earnings limitation as an SCRS service retiree and after age 55, a PORS disability retiree is subject to the same earnings limitation as a PORS service retiree.
Additional information for SCRS members receiving a disability retirement annuity
If you are an SCRS member who retired on the disability retirement requirements in place after December 31, 2013, you must annually establish continued approval for Social Security disability benefits to continue to receive an SCRS disability retirement annuity. Any post-retirement employment that causes you to no longer receive Social Security disability benefits will also result in the discontinuance of your SCRS disability retirement annuity upon your annual review date. For more information about returning to employment while receiving Social Security disability benefits, see Working While Disabled—How We Can Help, available from the Social Security Administration at http://www.ssa.gov/pubs/EN-05-10095.pdf.
If you are a retired member employed by an agency that adheres to state personnel policies, you will be exempt from the State Employee Grievance Procedure Act. This means your employment is at will. If, as a retired member, you return to work for an employer that is not governed by state personnel policies, you would be subject to your employer’s policies regarding employment status and rights. If you are a TERI participant (SCRS only) employed by an agency that is covered by the State Employee Grievance Procedure Act, you will be exempt from the requirements of that Act (employment is at will). If you are a TERI participant who works for an employer that is not governed by state personnel policies, you would be subject to your employer’s policies regarding employment status and rights. Any payout of unused annual leave to you as a working retiree will not be used in calculation of your benefit. If you have any questions regarding your employment status and rights upon becoming a TERI participant, contact your employer for clarification.
Working 48 continuous months
If you return to employment and work 48 continuous months for a participating employer with an annual earnable compensation of at least 75 percent of the AFC used to calculate your monthly annuity, you may elect to cease your monthly annuity and become an active member of SCRS or PORS. If you become an active member again, you have the option to repay some or all retirement benefits. When you subsequently retire, your monthly annuity will be calculated as if you were retiring for the first time. TERI participation (SCRS only) does not count toward the 48-month period. If you begin this process for the purpose of establishing eligibility for retiree health insurance, please contact PEBA for assistance.
Incidental death benefit
If you are a TERI participant, or a retired contributing member of SCRS or PORS whose employer participates in the incidental death benefit program, after your death, a payment equal to your current annual earnable compensation will be paid to your beneficiary or trustee in lieu of the standard $2,000, $4,000 or $6,000 retired member benefit.
Working retiree contribution rate
If you are a retired member who returns to covered employment, you will contribute a tax-deferred percentage of your gross pay into your retirement account; however, as a retiree, you will not earn additional service credit or receive interest on your account. These contributions are part of the funding mechanisms put into place to help ensure the long term sustainability of your retirement plan.