For Members Nearing Retirement– Protection Occupations
Important Information About Your IPERS Retirement Benefits |
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Returning to Work After Retirement
You may decide to return to work after retirement. Whatever the reason, it’s important to understand how your retirement benefits may be affected, based on:
- Your age.
- The type of employer you work for.
- How much you earn.
Where You Work Makes a Difference
If you are retired and return to work with an employer that is not covered by IPERS, there are no employment restrictions—you can work as soon and as much as you wish with no effect on your IPERS benefits. However, please keep in mind that social security has certain income limitations that apply to your social security benefits.
If you are retired and return to work for an IPERS-covered employer after completing your bona fide retirement, there are certain earnings restrictions you should understand before accepting any employment. The earnings restrictions depend on your age when you begin benefits.
| What Is a Bona Fide Retirement? |
To have a bona fide retirement, you must meet all of the following conditions:
- Apply for and begin receiving monthly benefit payments.
- Terminate employment with all IPERS-covered employers, including noncovered service with covered employers.
- Remain unemployed with all IPERS-covered employers for 1 month, and not work in covered employment for 3 additional months.
The bona fide retirement period begins with your first month of entitlement for retirement benefits as approved by IPERS. (For example, if your first month of entitlement to benefits is January, noncovered employment with a covered employer can begin in February and covered employment with a covered employer can begin in May. However, employment with a noncovered employer can begin at any time.)
It’s important that you follow bona fide retirement rules; otherwise your benefits could be revoked. You will be required to return all benefits paid by IPERS if you don’t have a bona fide retirement. If you have questions regarding reemployment, contact IPERS. |
If You Are 55 up to Age 65
When You Begin Benefits
You must complete a bona fide retirement before returning to work with any IPERS-covered employer.
If you return to covered employment after completing a bona fide retirement, your earnings will be subject to an annual earnings limitation. Currently, this annual earnings limitation is $30,000 of IPERS-covered wages per calendar year or the annual social security wage limit, whichever is higher. These wage limits may change each year. Visit www.ssa.gov.
Employer contributions made to qualified and nonqualified retirement and deferred compensation plans and arrangements will be counted as wages when determining the earnings limitation, even though they will not be treated as IPERS-covered wages.
If you exceed the annual earnings limit, your monthly retirement benefit for the remainder of the calendar year will be reduced by 50 cents for each dollar of IPERS-covered wages you earn over the earnings limitation.
If You Are Age 65 up to Age 70 When You Begin Benefits
You must complete a bona fide retirement before returning to work with any IPERS-covered employer. However, IPERS does not impose a limit on the amount you can earn.
If You Are Age 70 or Older When You Begin Benefits
You may return to work in any type of employment at any time, without completing a bona fide retirement. Also, there is no limit on the amount you can earn. However, you must end all employment with covered employers for at least 30 days in order to have your retirement benefit recalculated. Please keep in mind that you must begin receiving your IPERS retirement benefits by April 1 of the year after the year in which you turn age 70½ if you are no longer employed by an IPERS-covered employer.
Returning to Work After Qualifying for Disability Benefits
If you return to IPERS-covered employment after beginning to receive Special Service disability benefits, benefits will stop immediately. If you return to non-IPERS-covered employment, benefits may be limited.
If you are receiving regular disability benefits and return to covered employment after completing a bona fide retirement, your disability benefits will be suspended if you are under age 55. If you are over age 55, your benefit amount will be reduced to the amount you would have received without the disability provision applied to your benefit.
If you are receiving IPERS disability benefits and return to covered employment after completing a bona fide retirement, you will be required to certify that you are still eligible to receive social security disability or railroad retirement disability benefits. If you do not certify that you are still eligible, your IPERS disability benefits will be suspended if you are under age 55. If you are over age 55, your benefit amount will be reduced to the amount you would have received without the disability provision applied to your benefit.
Recalculating Your Benefit
When you are ready to retire again, contact IPERS to have your retirement benefits refigured to include any additional benefits you earned during your reemployment.
Your reemployment period (the period you work after you retire) is considered a separate period of service. Any benefits you receive for reemployment will be calculated separately—even though they may be treated as part of your original benefit for income tax purposes.
You may have the second benefit added to the initial monthly payment or receive a one-time lump-sum payment. If you end reemployment and do not request a monthly payment or lump-sum payment within a year, a lump-sum payment will automatically be paid to you.
If your reemployment period is less than 4 years, the formula used to recalculate your additional benefits is different from the standard formula. Your benefits will be determined using a money purchase formula that is based on the total amount of the employee and employer contributions to your account plus the accumulated interest.
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