Jeff Kempker, CEBS, CRC
Americans are embracing a new view of retirement that includes staying active, volunteering, or even taking on a part time or full time job. And while the #1 reason people take a job after retiring is because they need the money, the #2 reason is boredom. If you are thinking about accepting a job after you retire, there are several things you should know before jumping back into the workforce.
Non-LAGERS Employment
I have talked to several LAGERS members who have said their dream is to retire and then become greeters at Wal-Mart. I’m not really sure of the attraction to this occupation, but I can tell you that this would be allowed under LAGERS’ rules. Your retirement benefit will not be affected if you go back to work either part-time or full-time for any employer that is not in LAGERS.
Part Time LAGERS Employment
You can go back to work part-time for a LAGERS employer, even one from which you are receiving a benefit, and the current benefit will not be affected. Be careful here, however, as LAGERS defines part-time differently than a simple 40-hour work week. Each LAGERS employer has chosen a full time definition of either 1,500, 1,250, or 1,000 hours per year. Check with our office about how many hours you can to work if you plan to work for another LAGERS employer after retirement.
Full Time LAGERS Employment
What about working full time for a different LAGERS employer than the one from which you retired? This is allowed too, but you must have at least one-month break between your last day of work or your retirement effective date (whichever is later) and the date you start work at the new employer. For example, if your last day of work is December 23rd and your retirement effective date is January 1st, you could not start working full time with a different LAGERS employer until after February 1st. If you don’t have that one month break, we would have to suspend the monthly benefit you are currently receiving. So take a month off, you deserve it!
You would again be covered under LAGERS at your new employer after you complete the one month break. You would then be eligible for a second benefit after 12 consecutive months of employment. All the while, receiving your full, uninterrupted benefit from your first employer. The benefit from your second retirement would be calculated independently from your first retirement and would simply be added atop the first benefit when you retire the second time. All of this can get a bit tricky, so if you are planning to go back to work for a LAGERS employer, either part-time or full-time, please contact us so we can walk you through it!
There may be a situation where you must go back to work full time for the employer that you retired from. The current monthly benefit from this employer would be suspended, you would again become an active member of LAGERS, and would be eligible for a second benefit, calculated independently of the first benefit, after 12 consecutive months of employment.
What about contract or consulting work? I am asked frequently about going back to work for the same employer on a contract basis since true contract workers are not covered under LAGERS. This is OK too, so long as the nature of the position is truly contractual. This means that your former employer is contracting with a company you work for and you are then providing services to your former employer. In this case, your employer is the company, not your former local government employer. Simply signing a contract with your former employer does not make you a ‘contractual’ employee in LAGERS’ eyes. You are likely eligible for LAGERS coverage and not able to continue receiving your monthly retirement benefit if you are on the payroll of your former employer and working the right number of hours.
If there is one take away from this blog it would be to contact LAGERS BEFORE you re-employ either part time or full time with a LAGERS employer so that your benefit is not interrupted unexpectedly.
Jeff Kempker, Manager of Member Services