Working After You Retire

If your pension is based on a disability, special limitations apply if you go to work (whether for the state or another employer). Contact ORS in advance if you're a disability retiree under age 60 considering a return to employment.

If you retire under the regular age and service provision (not under a disability), you do not need to report any employment unless you return to work for the state of Michigan. If you return to work for the state either directly or indirectly, through a contractual arrangement with another party, on or after October 1, 2007, you must forfeit your state pension for the duration of the reemployment. If you meet these criteria you should complete section 1 of the Retiree Rehire Certification form (R0792G) at time of hire. The hiring agency should complete section 2 and then return the form to ORS.

Who must forfeit their pension?

• Retirees employed directly by the state
  Retirees hired on or after October 1, 2007, must forfeit their pensions. This includes retirees hired on an ad hoc, infrequent or advisory basis, and Special Personnel Services (SPS) contractors.
• 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 1, 2007
  Retirees who began reemployment with the state before October 1, 2007, as long as they remain continuously employed by the state do not need to forfeit their pensions.
• Independent contractors
  Retirees who are rehired and meet the criteria of independent contractors do not need to forfeit their pensions. IRS Publication 15-A and the 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. Hiring agencies should consult their legal counsel for assistance with these contracts.
• 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.

Effects on insurances

You may only be enrolled in one state group insurance plan at a time. If you choose to remain in the retiree insurance plan, ORS will bill you directly for the retiree portion of the insurance premium.

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.