There are two ways retirees may return to work with an MCERA employer:
- On an approved, limited basis of no more than 960 hours per fiscal year in a position that is not eligible for MCERA membership while receiving their pension, or
- By suspending their retirement to return to work in an MCERA-eligible position and reinstating as an active MCERA member (this is referred to as a “reinstatement”).
Rules Governing Retirees Returning to Work
An MCERA retiree can work for your agency under a contract or as a part-time employee and continue to receive uninterrupted monthly retirement benefits. However, there are strict Internal Revenue Service (IRS) regulations and state laws, as well as MCERA resolutions and policies that you and the retiree must follow.
Retirees can work for your agency (without reinstatement to active status) if the retiree meets all of the following:
- Had a bona-fide separation from service, meaning there was no prearranged agreement between the employee and employer to return to work after retirement.
- Satisfies the applicable break in service between employments (usually 180 days) or falls within an exception.
- Has specialized skills needed to perform work of limited duration, or the retiree’s employment is needed during an emergency to prevent stoppage of public business.
- Did not receive unemployment insurance compensation during the 12-month period prior to the re-employment.
- Is not returning to a position from which they are receiving a disability retirement benefit. (If the former employee is receiving a disability retirement, contact MCERA for additional information.)
- Will be compensated at an amount not less than the minimum, nor more than the maximum, monthly base salary paid to other employees performing comparable duties.
- Will not work more than 960 hours per fiscal year.
Steps to Certify a Retiree’s Return to Work
Employers are responsible for ensuring that retirees meet these requirements prior to hiring and must track and report all hours worked in any capacity, including those hired through a contract.
Step One: Determine When the Retiree Can Return to Work
Step Two: Complete & Return the Certification of Compliance for Post-Retirement Employment Form
The required time period between retirement date and reemployment differs depending upon whether the retiree is a general or safety member, their age at the time of retirement, whether they received a retirement incentive, and whether they received unemployment insurance.
General Retirees vs. Safety Retirees
General retirees must have a 180-day break in service following retirement before returning to work for an MCERA employer. A General member can return to work before the end of the 180 days only if the appointment is necessary to prevent work stoppage in an emergency and is approved by the employer's governing body, such as the County Board of Supervisors, in a public meeting. Safety retirees are generally exempt from the 180-day separation requirement if they are returning to work in a safety position.
Other break in service rules may still apply for both General and Safety retirees, in accordance with IRS regulations on age at retirement, listed below.
Age at Retirement
Anyone who retires younger than normal retirement age (59 for General members, 50 for Safety) is required to take a minimum break in service of 90 days before returning to work as a retiree, even to prevent stoppage of work in an emergency.
If the retiree took advantage of an employer incentive to retire, the retiree must wait 180 days after retirement to begin working, regardless of any other circumstance. The Board of Supervisors or District governing board cannot approve the rehire until after 180 days has expired.
A retiree who receives unemployment insurance arising out of prior employment with the same employer may not be employed in any public employment capacity for a period of 12 months after their last day of employment.
Step Three: Pay the Correct Rate of Pay & Limit Work to 960 Hours Per Fiscal Year
Regardless if the retiree will be working under a contract or as extra help, a Certification of Compliance for Post-Retirement Employment Form completed by both the retiree and the employer must submitted to MCERA prior to commencing services. This certification is also required at every change in the rehired retiree's position (job class) or employment type (extra help, contract, seasonal, etc.).
Step Four: Report Retiree Worked Hours to MCERA
Rate of Pay
Regardless if services are provided by contract or extra help, the hourly rate of pay must be within the salary range of employees performing comparable duties.
960 Hour Limit
Retirees may continue to receive their retirement benefit if their work is limited to 960 total hours per fiscal year (July 1 to June 30), regardless of whether their employment is with one or multiple MCERA employers. Hours classified as overtime also count toward the 960-hour limit. Once the 960-hour limit has been reached, the retiree must stop working immediately or their retirement benefit will be stopped until the beginning of the next fiscal year (July 1).
Report to MCERA on a monthly basis the hours worked by all retirees working under contract, part time or extra help terms. As a courtesy, MCERA will use this information to notify each retiree as they approach their hour limit.
Suspension of Retirement and Reinstatement to Active Employment
If you are rehiring an MCERA retiree in a capacity other than contract or extra help (e.g. in a permanent full time or eligible part time position), the retiree must become an active employee member of MCERA. Their pension will be suspended during the time period that they are an active employee. No specific break in service is required, however, by statute, before the reemployment can commence, a pre-employment medical exam is required, and the Board of Retirement needs to approve the reinstatement. Contact MCERA for more information about this reemployment process and how to plan ahead.
The employer and employee are responsible for making sure that all rules are followed, and that the 960-hour limit is not surpassed.