There are many reasons to return to work after service retirement and we understand that it is a personal choice. If you return to work for an employer that does not participate in the retirement plans PEBA administers, we wish you the best and you need not read any further. If you return to work for an employer that does participate 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 may 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 exceptions to the earnings limitation:
- Members who retired before January 2, 2013, regardless of age at retirement.
- SCRS members who retired on or after January 2, 2013, but were age 62 or older on their date of retirement.
- PORS members who retired on or after January 2, 2013, but 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.
- Class One law enforcement officers who retired under PORS prior to January 1, 2018, and are employed as critical needs school resource officers. PEBA must be notified of the officer’s exemption, and this exemption is contingent on continued approval in each year’s budget.
- 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.
Unless you meet an exception 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 for as long as you have covered employment.
$50,000 earnings limitation for some retired SCRS members
Senate bill 704 increases the earnings limitation for some retired South Carolina Retirement System (SCRS) members who work in the state’s public schools. The annual earnings limitation is 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 may 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 should 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 may earn the difference between your adjusted average final compensation (AFC) at retirement and your disability benefit without affecting your benefit. More information is available in the member handbooks for each system.
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 percent of the AFC used to calculate your monthly benefit, you may 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 of time. 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, please 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 into the system. The contribution rate will be the same as it is for active employees. However, you will not earn service credit or receive interest on your account.