A.07 Retiree earnings limitations (retired before 7/1/2010) (formerly 9.03)

Marked obsolete 07/01/2018

OBSOLETE section - MPSERS retirees who return to work to a MPSERS reporting unit may have an impact on their pension and insurance premium subsidy. The retiree and the employing reporting unit have an important responsibility in this process.

• The retiree is responsible for understanding the working after retirement rules and how they affect their pension and insurance premium subsidy. Resources for retirees are available on the ORS member information website for retirees that return to work.
• The reporting unit is responsible for accurately reporting retirees to ensure the guidelines of the working after retirement rules are met.

For that reason, this section no longer applies.

When a retiree from this retirement system earns wages from a participating reporting unit, the retiree is subject to earnings limitations or a cessation of pension payments and insurance premium subsidies for the duration of the employment. This includes retirees who have elected an Optional Retirement Plan (ORP). Your reporting unit must report retiree wages to ORS; however, the responsibility for tracking wages to make sure that the earnings limit is not exceeded belongs to the retiree.

The retiree may earn the greater of the statutory limits listed below without affecting the pension:

• One-third of the final average compensation. For this purpose, the salary average is increased by 5 percent (compounded) for each calendar year the pension recipient has been retired. In the first year of retirement the earnings limitation is prorated.
• The Social Security income limit for that specific year. If one-third of a retiree's final average compensation is lower than that year's Social Security income limit, the retiree may make up to the higher amount. The Social Security income limit changes annually. Visit the Social Security Administration's website for more information about the Social Security income limit.

Eligibility for the group health and dental/vision insurance is not affected by earnings. However, if the retiree's pension is suspended because the earnings exceed the limit, the insurance will also be suspended. If this happens, the retiree may request a continuation of insurance, but will be responsible for the portion of the premiums previously withheld from the pension. This may be expensive.

For every dollar the retiree earns above the limit, he/she must return one dollar to the retirement system up to the annual pension amount.

See section 9.04: Exceptions to the Earnings Limitations for Members Who Retired Before 7/1/2010 for more information.

Last updated: 07/01/2018