Working After You Retire

If you go to work after you retire, your earnings usually won't affect your pension, with the following exceptions:

Disability retirement pension

If you are receiving a disability retirement, special limitations apply if you go to work for any employer. Contact ORS in advance if you're a disability retiree under age 60 considering a return to work.

State of Michigan employment

If you return to work for the state as an employee, independent contractor, or through a contractual arrangement with another party, you must forfeit your state pension for the duration of the reemployment.

You should complete the Retiree Rehire Certification (R0792G) at time of hire.

If you are rehired as a state employee you will be enrolled in the Defined Contribution 401(k) plan.

Who must forfeit their pension?

• Retirees employed directly by the state
  Retirees must forfeit their pensions when returning to work for the state of Michigan. This includes retirees hired on an ad hoc, infrequent or advisory basis, and Special Personnel Services (SPS) contractors.
• Independent contractors
  Retirees must forfeit their pensions if returning to work for the state of Michigan as an independent contractor after October 1, 2010. This includes independent contractors who may have had an existing contract on or before October 1, 2010 and the contract was extended or amended after October 1, 2010.
• Retirees employed by a third party
  Retirees who are hired by a third party (e.g., temporary hiring agency) and are performing work for the state of Michigan must forfeit their pensions, regardless of who pays the wages.
• Some participants in the Defined Contribution (DC) Plan
  A participant in the Defined Contribution (DC) Plan who transferred from the Defined Benefit (DB) plan to the DC plan and took advantage of the 2002 early out must forfeit his or her pension payment upon reemployment with the state. However, payouts from any DC accounts would not be affected.

Who does not need to forfeit their pension?

• Retirees rehired before October 2, 2007
  Retirees who began reemployment with the state before October 2, 2007, as long as they remain continuously employed by the state, do not need to forfeit their pensions.
• Independent contractors
  Retirees who are rehired on or before October 1, 2010 and meet the criteria of independent contractors do not need to forfeit their pensions. IRS Publication 15-A and the Economic Reality Test set forth in McKissic v. Bodine, 42 Mich App 203 (1972) are used to determine if a retiree meets the criteria. ORS will rely on each individual hiring agency to ensure that any independent contract they put in place meets the criteria of an independent contractor. However, if a contract is extended or amended after October 1, 2010 the retiree must forfeit his or her pension. Hiring agencies should consult their legal counsel for assistance with these contracts.
• Retirees who are rehired by the Department of Corrections (DOC)
  Retirees who are rehired by the DOC to provide health care services do not need to forfeit their pensions as long as all of the following conditions are met:
  • DOC must first endeavor to recruit a person through the normal hiring process to fill the position. If unsuccessful, DOC must provide written notice to the State Budget Office (SBO) and the Office of Retirement Services (ORS) of the need to rehire a SOM retiree.
  • Within 30 days of rehire DOC must provide in writing the retirees' name, employment capacity, and total payable compensation, to SBO and ORS.
  • Retiree must be in a limited-term position with no benefits paid and paid on a per-diem basis.
• Defined Contribution (DC) Plan participants
  A participant in the Defined Contribution (DC) Plan does not need to forfeit his or her pension unless he or she transferred from the Defined Benefit (DB) plan to the DC plan and took advantage of the 2002 early out.
• Special Assistant Attorney Generals
  A retiree who was an Assistant Attorney General and is appointed as a Special Assistant Attorney General does not need to forfeit his or her pension if the Attorney General determines that, as a result of the retiree's previous employment with the state, the retiree posses specialized expertise and experience necessary for the appointment and that the appointment is the most cost-effective option for the state.

Effects on insurances

You will have a choice of active or retiree insurances. If you choose to keep your retiree insurances, we will arrange for premium billings when you report your employment.

Upon termination of employment

Upon terminating employment with the state you should notify ORS in writing so pension payments can be restarted. Your pension will become effective again the month after employment with the state has ceased. You will not be eligible for a pension recalculation.