In fiscal year 2009, the Employees’ Retirement System of Georgia (ERSGA) had approximately 113,000 active members across six retirement plans and paid benefits to nearly 45,000 retirees in FY09. A state audit estimated that of those retirees, 6 percent or 2,519 were re-employed and working with a state entity during the fiscal year.
It is also estimated that over half of rehired retirees were members of the Public School Employees Retirement System (PSERS). PSERS, as you remember from a previous column primarily consists of school support personnel such as bus drivers, administrative support, and cafeteria workers.
During that same fiscal year, the Teachers Retirement System (TRS) had more than 226,000 active members and a little more than 82,000 retirees. A similar state audit estimated that 15 percent or 11,626 of the 75,555 retirees examined were re-employed by a state or local government entity during FY09. Last year, prompted by concerns that some state retirees were returning to work for the state and “double dipping” by receiving retirement benefits and active employee compensation. The Senate Appropriations Committee requested these audits on State Retiree Re-employment to examine the prevalence, incentives and cost of retirees returning to work with the state.
Limitations on rehiring retirees
All retirees in Georgia must have at least a one month break in service between their effective date of retirement and returning to work. The retiree may then return to work for a state or local entity with some limitations. The limitations on returning to work vary across the different retirement systems. Imposing these limits on re-employment with the state discourages members from seeking a supplemental income at the expense of the state.
Any retiree may elect to work in a different capacity without limitations by suspending or terminating his benefits during re-employment. Retirees from all retirement systems may return to work for the private industry, federal government or another state without limitation.
Retirees from an ERSGA managed-plan, with the exception of PSERS members, may return also to work for a local school system or for a court as a senior judge without limitation. ERS members who retire before reaching normal retirement age must take a two month break before returning to employment and the employer must certify that no agreement exists to allow the employee to return to service.
Upon returning to work for the state or University System of Georgia, ERSGA retirees may only work a maximum of 1,040 hours per calendar. Retirement benefits will be suspended for the remainder of the calendar year if the employee works more.
Re-employed retirees will not receive credit toward additional retirement benefits nor will their employers contribute to the retirement system on their behalf.
PSERS retirees who have reached the normal retirement age, 65, at or before retirement may return to work for any employer, including the state, with no limitations. If the employee retires and returns to work prior to reaching 65, his retirement benefits will be suspended while re-employed.
Some draw full pay and retirement
Teachers Retirement System (TRS) retirees may be able to return to work as a paraprofessional or substitute on a part time basis after one month or as a full-time teacher, principal, superintendent, counselor and media or improvement specialist after one year. TRS retirees are the only class of retirees who can return to work at full salary and draw full retirement as well.
Starting in 2002, Georgia law was changed and restrictions removed in several revisions of state code until finally in 2008, date restrictions were removed and after a one-year break, teachers can return to work full-time even though drawing full retirement benefits. This change was made during a period of time several years ago, when there was a teacher shortage.
Administrators such as principals and superintendents can retire and return to work similarly, principals can’t work with the same school nor superintendents with the same system. Given the employment picture today, it may be time to review that legislation before the present sunset date of June 30, 2016.
Next: “What should be our policy on retiree re-hires”
Full audit findings can be found on the Performance Audit site at the Department of Audits and Accounts under the following titles:
State Retiree Re-employment: A Review of Incentives, Prevalence and Cost (December 2010)
Teachers Retirement System of Georgia Re-Employed Retirees: A Review of Incentives Prevalence and Cost (March 2011)
I may be reached at
234 State Capitol, Atlanta, GA 30334
(404) 656-5038 (phone)
(404) 657-7094 (fax)
E-mail at Jack.Hill@senate.ga.gov
Or call toll-free at
1-800-367-3334 day or night
Reidsville office: (912) 557-3811