Post–Retirement Employment

Retired Teachers

Agenda

• THE MOST IMPORTANT REQUIREMENT- THE 30-

DAY BREAK IN SERVICE.

• Post-Retirement Limits - The 90/180 Day Rule.

• The “Good Faith Effort” for Vacant Positions.

• Substitute Teaching.

• Working for Corporations.

• Post-Retirement Limits - The 75/150 Day Rule.

• Post Retirement Employment Prohibitions and Limited

Exceptions.

• Exceeding the Limits.

• Volunteering and Post-Retirement Employment.

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THE MOST IMPORTANT

REQUIREMENT- THE 30-

DAY BREAK IN SERVICE • The guiding rule is §401(a) of the IRS Code regarding

“in-service” distributions.

• Fundamental requirement of the Code: The employee must retire and terminate employment

• Such employment or re-employment may begin no earlier than 30 days from termination of active service and retirement.

• There should be a clear separation from service and subsequent re-employment that is not pre-arranged or so short in duration as to raise a legitimate issue of whether there has been a true separation.

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THE MOST IMPORTANT

REQUIREMENT- THE 30-

DAY BREAK IN SERVICE

• The termination should be consistent with any other

retirement and termination i.e.:

– discontinuance of benefits;

– payment of any accrued vacation, sickness or other benefits that

are paid in the course of termination of employment by state law

or other employment practices

• No additional contributions may be made by or on behalf

of the retired member.

• No additional pension credits can be earned.

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Post-Retirement Limits

The 90/180 Day Rule

• Pursuant to the RIGL, half-days of teaching are 3 hours

or less.

• The school year is generally Sept. 1 to Aug. 31, but may

vary by school department.

• If you hire a retired Teacher in a part-time position, the

number of days worked is based on a standard school

year and is calculated by the percentage of the position.

– For example, 2/5 equates to 72 full working days (2/5 x 180 =

72). The retired teacher may not work more than half-time, as

that would exceed the 90-day limit.

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Post-Retirement Limits

The 90/180 Day Rule

• Monthly pension benefits will be suspended in the event

there is no 30 day break in service.

• Teacher retirees may substitute teach or fill a vacant

position for no more than 90 full days or 180 half-days in

any one school year.

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The “Good Faith Effort”

Vacant Positions

• For Teachers, no employment to fill a vacant position may be offered to a retiree subject to §16-16-24 unless:

– the employer has made a good faith effort to fill the position with a non-retired employee without success.

– certifies in writing that it has done so to ERSRI and to the bargaining agents of all education unions with whom the employer has collective bargaining agreements.

• Notice of the employment must be sent monthly to the ERSRI by the employer and retired employee.

• A vacant position includes, but is not limited to, a tutor, mentor principal or mentor assistant principal.

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Substitute Teaching

• The literal meaning of substitute is utilized meaning that you

must be working in place of a regular employee who is absent.

• Substitute teaching is limited by law to “Teachers” (as defined by RIGL §16-16-1(12)) who are substitute “teaching” (as defined RIGL §16-16-(13)).

• Substitute teaching is limited to teaching, supervising and superintending or assistant superintending of schools. Note that this includes Principal and Administrator positions in which the job description includes direct supervision of personnel.

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Working for Corporations?

At its January 10, 2001 meeting, the Retirement Board

adopted the following policy:

“Voted: To accept the recommendation of the Rules and

Regulations subcommittee that the intention of the law and

regulations of the Retirement Board is a person may not do

as a corporation, or as an employee of a corporation, what

an individual cannot do.”

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Post-Retirement Limits

The 75/150 Day Rule

Post Retirement Employment Other Than as a

Teacher in Participating Municipalities.

• This law applies if you are a retiree working in a school

department but not as a Teacher who is substitute

teaching or filling a vacant position.

• Teachers can fill a non-certified position in a school

department, for example, custodian, secretary, clerk,

etc., for no more than 75 days or 150 half days.

– The 75 day figure is calculated on a school year basis (generally

September 1 through August 31).

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Post-Retirement Limits

The 75/150 Day Rule

• You may also work for a participating municipality for no

more than 75 days or 150 half days in a calendar year

(January – December) filling any other position.

• A half day is considered 4 hours or less.

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Summary Clarification on

Reporting

• As a retired Teacher substitute teaching or filling a

vacant position, a half day is 3 hours.

• As a retired Teacher working as a custodian, secretary,

clerk, etc. in a school department, a half day is 4 hours.

• In both cases, the school year is generally September 1

through August 31. The school years may vary by

department.

• Contact your office of employee benefits to determine

the effect of a suspension of your pension benefit on

your healthcare. 12

Post-Retirement

Administration

• Monthly reporting forms are available on our website at

http://www.ersri.org/public/forms/PostRetirement.pdf.

• Both the employer and the employee must sign the form.

• Incomplete forms will be returned to the employer and

the retiree risks a suspension of their benefit.

• Disability retirees are also subject to the laws governing

post-retirement employment and additional statutory

wage limitations.

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Post Retirement Employment

Prohibitions and Limited

Exceptions

• No retiree may work for the State of Rhode Island in any

capacity.

• If you do work for the State of Rhode Island, your

pension benefit will be suspended for the duration of any

employment or re-employment.

• Retirees may be employed or reemployed at a State

School, College or University for the limited purpose of:

– classroom instruction

– academic advising

– coaching

– driver education and/or motorcycle driver education

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Post Retirement Employment

Prohibitions and Limited

Exceptions

• Gross wages cannot exceed $15,000 in any one

calendar year and must be reported to the retirement

system at the end of each calendar year.

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Exceeding the Limits

• Any violation can mean a suspension of retirement

benefits for the retiree.

• Rhode Island General Laws, Titles 36, 16 and 45 all

address post-retirement employment and the limitations

associated with this type of employment. In the event the

retiree/employee exceeds either the day limit or

monetary limit, the pension benefit shall be suspended.

• If you exceed any of the limitations, there will be a day

for day offset on a pro rata basis of your monthly pension

benefit.

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Exceeding the Limits

• If you work for a State School, College or University and

you exceed the $15,000 per calendar year limitation,

there will be a dollar for dollar offset of your monthly

pension benefit i.e. - ERSRI will recoup any amount

over the $15,000 limit from your monthly pension benefit.

• In order to reactivate the pension benefit, which is

effective as of the date of retirement, ERSRI must be

notified by both the employer and employee when the

post-retirement employment ceases.

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Volunteering and Post-

Retirement Employment

• VOLUNTEERING is limited to a position for which you

would not normally be paid.

• You must not be paid any remuneration or consideration

whatsoever for any period prior to, during, or after

fulfilling the positional requirements, including but not

limited to a training period, orientation, or probationary

period.

• The employer must provide a letter to ERSRI which

certifies that the member is volunteering for a particular

position and is not receiving any remuneration or

consideration whatsoever for any period of the

volunteering.

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How can I get answers to my

questions regarding my

participation in post-

retirement employment?

• On our Website at www.ersri.org

– eCompass newsletters

– Employer and Employee handbooks

• Memoranda provided to all MERS and ERS Units

including School Departments and the State of Rhode

Island.

• Compass newsletter sent directly to your home address

and via email.

• Call Our Office at: 401- 457-3900

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How can I get answers to my

questions regarding my

participation in post-retirement

employment?

• Email us at: https://www.ersri.org/public/contactus/

• Write to us at:

40 Fountain Street, 1st Floor

Providence, RI 02903

• Reference Rhode Island General Laws §36-10-36, 16-

16-24, and 45-21-54.

• Ask for a Live Presentation for your Department or

Agency

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Thank You For Your Attention!

Questions?