Re-employment After Retirement
After you have officially retired and are receiving monthly benefits, you will be subject to the reemployment provisions described below if you perform work in any capacity for an employer under the same Retirement System from which you retired. These provisions may require you to work under an earnings limitation or to re-enroll as a contributing member of the Retirement System. You will be subject to reemployment provisions based on the nature of the particular work you perform for an employer under the same Retirement System from which you retired, regardless of your job classification or your technical employment status (which may include being assigned to work for the employer by a private company such as a temporary staffing agency).
Reemployment After Receiving Early Or Service Retirement Benefits
Teachers and State Employees
If you retire with monthly early or service retirement benefits from Teachers' and State Employees' Retirement System (TSERS) and are reemployed by an employer that participates in TSERS, the following apply:
If you retired under TSERS, to avoid a financial penalty, you must be retired at least 6 months before performing any work for a TSERS employer in any capacity (except as a school board member, a member of a board of trustees of a community college or of any constituent institution of the University of North Carolina, or a volunteer in a position normally designated as an unpaid bona fide volunteer position). As an active employee, you may not establish an agreement for post-retirement employment with a TSERS employer.
The financial penalty for returning to work for a TSERS employer on a part-time, temporary, interim, or fee for service basis, during the 6 months immediately following TSERS retirement, will be the lesser of the following as determined by the Retirement System:
- You will be deemed to have retired the month after the month you ceased performing services for the employer and repay all retirement benefits received and the cost of state-provided State Health Plan premiums until that date; or
- You will be required to make a lump sum payment to the retirement system equal to three times the compensation earned during the 6-month period.
NOTE: If you are reemployed in a permanent TSERS position which requires at least 30 hours per week of work on a recurring basis for 9 months per year, your retirement payment must be stopped and you will again become a contributing TSERS member.
If you return to work for a TSERS employer in a position that requires TSERS membership during the six months immediately following your retirement date, your TSERS benefits will be canceled retroactively to your retirement date, and you must repay all retirement benefits received and the cost of state-provided State Health Plan premiums since your retirement date. If your retirement benefit is canceled, your State Health Plan retiree group coverage also will be canceled.
After a 6-month break, you may return to work in a position that requires membership in TSERS. Your retirement benefit will be suspended on the first day of the month following the month of reemployment and you will again become a contributing member in the month in which you are restored to membership service. (Your TSERS retirement benefit will also be suspended if you return to membership service under the Consolidated Judicial Retirement System.)
Local Governmental Employees
If you retire with monthly early or service retirement benefits from Local Governmental Employees' Retirement System (LGERS) and are reemployed by, or otherwise engaged to perform work for, an employer that participates in LGERS, the following apply:
- You cannot perform any work for an LGERS employer during the month in which your initial LGERS retirement became effective without a financial penalty.
- The financial penalty for returning to work for an LGERS employer on a part-time, temporary, interim, or fee for service basis, during the month immediately following the effective date of LGERS retirement, will be the lesser of the following as determined by the Retirement System:
- You will be deemed to have retired the month after the month you ceased performing services for the employer and repay all retirement benefits received until that date; or
- You will be required to make a lump sum payment to LGERS equal to three times the compensation earned during the month immediately following the effective date of retirement.
NOTE: If you are reemployed in a regular LGERS position which requires at least 1,000 hours of work per calendar year, your retirement payment must be stopped and you will again become a contributing LGERS member.
If you return to work for an LGERS employer in a position that requires LGERS membership during the month of your effective date of retirement, your LGERS benefit will be canceled retroactively to your retirement date, and you must repay all retirement benefits received since your retirement date.
After a one-month break, you may return to work in a position that requires membership in LGERS. Your retirement benefit will be suspended on the first day of the month following the month of reemployment and you will again become a contributing member in the month in which you are restored to membership service.
Returning to Service
After the required break, if you return to service and contribute for at least three additional years, at the time you terminate your second period of employment, you will have the following choices:
- Combine your service from your first and second periods of employment to create one (generally larger) monthly retirement benefit. You can change the retirement payment plan and/or beneficiary you selected at the time of your original retirement. (Note: If Option 4 was elected for your first retirement, the Retirement System must actuarially adjust benefits when you retire again.)
- Reinstate your first retirement account and withdraw your contributions only from your second account
If you return to service and contribute for less than three additional years, at the time you terminate your second period of employment, your first retirement benefit will be reinstated and you will have the following choices for your second retirement account:
- Apply to receive a second (generally smaller) monthly benefit based on your second period of employment
- Withdraw your contributions from your second account
- Leave your second account open
After the required break, if you return to work with an employer that participates in the same Retirement System from which you retired in a position not eligible for membership in the Retirement System, you will be subject to earnings restrictions of the greater of the following:
- 50 percent of your gross 12-month pre-retirement salary (excluding termination payments) or
- $39,660 (2023 amount)
The dollar figure is adjusted annually according to the Consumer Price Index, which is a national measure of increase in the cost of living from one year to the next. These earnings restrictions apply for the 12 months immediately following retirement and for each calendar year following the year of retirement.
If you exceed your earnings limitations, your retirement benefit will be suspended the first day of the month following the month in which you exceed the limit for the remainder of the calendar year. Your retirement payment will start again on January 1 of the year after your benefit is suspended. If your earnings exceed the allowable amount in the month of December, your benefit will not be suspended.
TSERS - If your retirement benefit is suspended, your State Health Plan retiree group coverage also must be suspended. If your benefit is suspended and later reinstated, your State Health Plan retiree group coverage will not be reinstated retroactively. As a result, you may experience a lapse in your health coverage which means you may not have health coverage for a month or more.
When your retirement benefit is restored, your health coverage under the retiree group will be reinstated the first of the month following the month your retirement benefit is restored.
Before you accept reemployment with a TSERS employer, ask your new employer whether the employment will affect your health coverage, and if the reemployment will cause:
- Your State Health Plan retiree group coverage to be suspended.
- You to qualify for State Health Plan active group coverage and whether you will qualify for the state’s contribution toward your coverage.
For additional information, please see Return to work Laws on the Retirement Division website.