Thinking about working after retirement? If so, you need to be aware of some rules that apply if you are in the Teacher Retirement System and plan to work for a Texas public education institution.
If you’re a TRS retiree or a TRS-eligible employee considering retirement and would like to work for the A&M System or any Texas public education institution as a working retiree, you’ll need to meet the following requirements. These requirements apply to all service, disability, normal-age, and early-age TRS retirees who retired on or after January 1, 2001. TRS retirees who retired before January 1, 2001, are permitted to return to work without employment restrictions or reduction in TRS benefits.
For employment-after-retirement purposes, the definition of a “school year” is a 12-month period beginning Sept. 1 and ending Aug. 31 of the next calendar year.
TRS requires that you wait a full calendar month from your retirement date or end of your contract period, whichever is later, before returning to work in any position for any Texas public education institution. This includes volunteering to perform services that are normally provided by an employee.
For example, if your retirement date is May 31, you may not return to work until July 1. If your retirement date is May 31 but your contract requires you to work until June 15, you may not return to work until August 1.
If you return to work or volunteer service before the end of your required break in service, your retirement will be revoked and you’ll be required to repay TRS for all your benefits and reapply for retirement.
If you return to work after the required break in service but during the same school year in which you retired, the percent effort you can work during the remainder of the current school year is limited to 50 percent or less. The percent effort is measured in clock hours and must not exceed more than half the number of full-time working hours in the month or 92 clock hours, whichever is less.
Since the number of working days each month varies, the maximum hours you can work each month will vary as well. You will forfeit your annuity for any month in which you work more than 50 percent effort.
If you return to work after the required break in service and in a school year other than the one in which you retired, you may use the one-half time exception or the six-month exception for returning to work.
The six-month exception allows you to work up to 100 percent effort in any position for as long as six months during the school year. You cannot use the six-month exception in the same school year that your retirement occurred. You will forfeit your TRS annuity for any month after the sixth month that you work.
Additional exceptions also apply to TRS retirees and include:
For more information about these exceptions, refer to the TRS handbook or contact TRS.
For purposes of employment after retirement, a third-party entity is an entity retained by a Texas public education institution to provide personnel to the institution to perform duties or provide services that employees of the institution would otherwise perform or provide. Employment by a third-party entity is considered employment by a Texas public education institution and subject to the employment-after-retirement requirements unless you:
If you are a TRS member who is employed with a Texas public education institution as an independent contractor, you are not subject to the TRS laws and rules regarding employment after retirement. Therefore, if you are an independent contractor, your employment is not reported to TRS and your monthly annuity is not affected.
If you want to return to work as an independent contractor, you should carefully consider whether the work arrangement meets all legal tests for this status. The characterization of your relationship with the Texas public education institution as an independent contractor may be affected by laws such as those governing federal income tax and Social Security as well as TRS laws.
TRS recommends that you seek legal advice from your attorney as necessary to determine if you are an independent contractor. If your employment arrangement does not meet the legal tests for an independent contractor, you are regarded as an employee of the Texas public education institution rather than an independent contractor.
Your employment does not terminate for TRS purposes if, at the time of retirement, you have a contract, agreement or promise for future employment with a Texas public education institution. Arranging for future employment before retirement is permissible only when the following two conditions are met:
Specifically, if you meet the requirements for normal-age retirement, you may have a contract for employment during the school year in which you retire only if the employment is half-time or as a bus driver. If an agreement is for employment after the school year in which retirement occurs, a normal-age retiree may also have an agreement for full-time employment that does not exceed six months.
Employment after retirement that does not meet TRS exceptions can cause you to forfeit your monthly annuity, have your retirement revoked, and be required to repay benefits to TRS. Being educated about TRS rules for employment after retirement before accepting any position as a retiree can save you time and money in the future.
This article is part of an ongoing series of articles regarding retirement.
The information provided is from Employment
After Retirement (Excerpts from December 2005 TRS Benefits Handbook).
For more information, go to the TRS
web site or contact your System
member Human Resources office. 