There are many reasons to return to work after service retirement and we understand it is a personal choice. If you return to work for an employer that participates in the retirement plans we administer, this is called returning to covered employment and there are some rules you need to understand.

Break-in-service requirement for SCRS and PORS service retirees

To retire from SCRS and PORS, you must first have a complete, bona fide severance or termination of employment. After 30 days of retirement, you can be hired by an employer covered by one of the retirement systems administered by PEBA. If you return to covered employment sooner than 30 consecutive calendar days after retirement, your monthly benefit will be suspended while you remain employed by a participating employer. This 30-day requirement relates to retirement benefits only, not health insurance coverage.

Returning to covered employment information for retirees of GARS and JSRS is available in the member handbooks.

$10,000 earnings limitation

This rule, which can have a large impact on your income, does not limit the amount you can earn from covered employment. Instead, it limits your retirement benefit once your earnings from covered employment exceed the $10,000 limit. There are exemptions to the earnings limitation, and the exemptions are separate from one another. This means a retiree only needs to qualify for one exemption.

Unless you meet an exemption to the limitation, you will receive your retirement benefit until you earn $10,000 from employment in a covered position during a calendar year. Once you reach this amount, your monthly retirement benefit stops for the rest of the year. The limit resets the following calendar year. The limit remains in effect as long as you have covered employment.

These exemptions are provided by state statute:

• Members who retired before January 2, 2013, regardless of age at retirement.
• SCRS members who were age 62 or older on their date of retirement.
• PORS members who were age 57 or older on their date of retirement.
• Teachers who meet a critical needs exception. The S.C. Department of Education must annually certify that a member is working in a critical needs area, either academic or geographic.
• Members who receive compensation for service as an elected official, service as an appointee of the Governor with confirmation by the South Carolina Senate or service by appointment or election by the General Assembly.

In addition to the exemptions provided by statute, there can be exemptions to the earnings limitation added through a proviso in the budget each year. The following exemptions are in the fiscal year 2027 budget and are contingent on continued approval in each year’s budget.

• Class One law enforcement officers who retired under PORS on or before December 31, 2022, and are employed as critical needs school resource officers. PEBA must be notified of the officer’s exemption.
• SCRS and PORS retirees who had a period of at least 12 consecutive months after retirement during which the member did not work for any covered employer in any capacity. Members must certify to PEBA that they qualify for this exemption.
• SCRS and PORS retirees who are hired by a public school district as a school bus driver. PEBA must be notified of the bus driver’s exemption.
• PORS retirees who have been retired for at least 90 consecutive calendar days can return to covered employment under PORS and earn up to $80,000 annually without affecting their retirement benefit. However, if a law enforcement officer held a supervisory rank at the time of retirement, they are not eligible for the increased limitation if they return to a supervisory position. PEBA must be notified of the retiree’s exemption.

$50,000 earnings limitation for some retired SCRS members

Act 102 of 2021 increased the earnings limitation for some retired South Carolina Retirement System members who work in the state’s public schools. The annual earnings limitation increased to $50,000 for SCRS members who retired on or before April 1, 2019, and return to covered employment in the K-12 public education system. If a retired member is otherwise subject to the earnings limitation, all other employment remains subject to the regular $10,000 earnings limitation. A retiree can only qualify for this increased earnings limitation for a maximum period of 36 consecutive months of employment.

Returning to employment while receiving a disability retirement benefit

If you are receiving an SCRS or PORS disability benefit and under age 65 (SCRS) or age 55 (PORS), you must report earnings from any gainful (public or private) employment to PEBA annually, because there is an earnings limitation for all employment which is applied on a calendar year basis. You can earn the difference between your adjusted average final compensation at retirement and your disability benefit without affecting your benefit. More information is available in the member handbooks for each system.

Employment status

If you are a retired member employed by an agency that adheres to state personnel policies, you will be exempt from the State Employee Grievance Procedure Act. This means your employment is at-will. If, as a retired member, you return to work for an employer that is not governed by state personnel policies, you would be subject to your employer’s policies regarding employment status and rights.

Working 48 continuous months

If you return to employment and work 48 continuous months for a covered employer with an annual earnable compensation of at least 75% of the AFC used to calculate your monthly benefit, you can elect to cease your monthly benefit and become an active member of SCRS or PORS. If you become an active member again, you have the option to repay some or all retirement benefits to receive additional service credit for that period. When you subsequently retire, your monthly benefit will be calculated as if you were retiring for the first time. If you begin this process for the purpose of establishing eligibility for retiree health insurance, contact PEBA for assistance.

Working retired member incidental death benefit

If you are a working retired member and your employer participates in incidental death benefit coverage, a payment equal to your current annual earnable compensation will be paid to your beneficiary if you die while in service. Amounts paid to your beneficiary are considered taxable benefits; therefore, federal taxes will be withheld unless your beneficiary rolls over the money into another qualified retirement plan. It is up to your beneficiary to request that state taxes be withheld from the payment.

Return-to-work retirees and retirement system contributions

If you return to work, you must contribute a percentage of your pay to the system. The contribution rate is the same as it is for active employees. However, you will not earn service credit or receive interest on your account.