There is no limitation on the amount of reimbursement that may be recovered by the retirement system in these situations.

The information contained in the rest of this section assumes that the returning retiree has a “bona fide” retirement. If it is established at any time that the retirement was not made in good faith or that the employer-employee relationship was not completely severed, the provisions described below will not apply.

Effect of Post-retirement Employment on a PERS Retirement
(See also Fact Sheet #21)

Working for private industry, the federal government or a government agency in another state will not normally affect a member's Public Employees' Retirement System (PERS) retirement benefits. (See the "Disability Retiree" section below for exceptions to this.) Returning to public employment in New Jersey after retirement, however, could affect retirement benefits, as shown below.

Note: The information contained below assumes that the returning retiree has a "bona fide" retirement. If it is established at any time that the retirement was not made in good faith or that the employer/employee relationship was not completely severed, the provisions described below will not apply.

If a PERS Retiree Returns to Work in PERS-covered Position

Mandatory Reenrollment

In addition to the State agencies, over 1800 local employers throughout New Jersey participate in the PERS. A retired member should expect to reenroll in PERS when accepting public employment, when the employment meets the following conditions:

• The employee will work at least the minimum number of hours per
  week required for enrollment (35 hours for State employees or 32 hours for local government or State or local education employees);

• The employment is on a regular basis and the position is covered by Social Security, and

• The member's aggregate annual compensation (total yearly earnings) from all PERS employing locations will be more than $15,000 (except disability retirees), and

• The employee is not required to be a member of any other New Jersey State or local government retirement system on the basis of the same position; or

• The employee retired on a disability retirement and will now earn at least the minimum annual salary of the original membership tier.

However, a retiree who returns to a covered position cannot join the PERS if any of the following are true:

• The employee works less than 35 hours per week at a State employing location, or less than 32 hours per week at a local employing location.

• The employee's aggregate annual salary (total yearly earnings) from all PERS positions does not exceed $15,000 or for those retired on a disability retirement, the minimum annual salary for the original membership tier;

• The employee's position is not covered by Social Security;

• The employee is receiving a pension from another NJ State-administered retirement system;

• The employee is receiving a pension from a NJ local or county government pension fund;

• The employee is a seasonal employee; or

• The employee is an elected public official who retired from a public retirement system in this or any other state prior to being elected, and who retired from position(s) other than that of elected official.

Finally, a PERS retiree is exempt from reenrollment in the PERS in the following instances:

• A PERS retiree who accepts a PERS-covered teaching position at a public institution of higher education (State college or State university) is exempt from reenrolling in the PERS, no matter what the yearly salary earned, for the duration of this employment. A PERS retiree who accepts a position with the Department of Education of the State of New Jersey in a position determined to be of critical need by the Commissioner of Education is also exempt from reerollment, regardless of salary or duration of appointment.

• A PERS retiree who accepts a position with a board of education in a position determined to be of critical need by the superintendent of the district is exempt from reenrollment. Such employment taken with a board of education must be on a contractual basis for a period of not more than one year. Upon written request to the PERS Board of Trustees, this contract may be extended for an additional year, but cannot in any case exceed two years with any individual board of education.

Members of any of the State-administered retirement systems in New Jersey who have substantially complied with the requirements necessary to effect a retirement benefit other than a Deferred Retirement, and who become employed again in positions which make them eligible to be members of another retirement system, are not eligible for enrollment in that other system if the subsequent employment was begun on or after the actual retirement date from the first system.

In other words, if a member files for retirement, terminates employment prior to retirement, and starts a new job in a position covered by a different retirement system after the retirement date, the member would not be enrolled in the second retirement system.

Consequences for PERS Retirees

If a member accepts regular full-time employment in a position that is eligible for PERS enrollment, and the total aggregate compensation (total annual earnings) from all PERS positions in which the member is employed is greater than $15,000 per year, the member must reenroll in the PERS as a condition of employment.

The retirement allowance will be canceled for the duration of  employment and the employee becomes an active contributing member again. (If over the age of 60, the member must prove insurability to qualify for the group life insurance coverage.)

If the employee dies while enrolled in the second membership, no benefits from the previous membership or retirement are payable, other than the return of any contributions, plus interest, not already used to pay a retirement allowance.

This includes optional settlements and death benefits.If the member returns to employment under the PERS and is eligible for membership but fails to be enrolled, the member would be required to reimburse the retirement system in the amount of all retirement benefits received since the date enrollment should have occurred. In addition, the employee would be required to pay pension contributions in the form of back deductions back to the enrollment date.

You, as the employer, may also be liable for pension and Social Security contributions. There is no limitation on the amount of reimbursement that may be recovered by the retirement system in these situations.

Retiring from a Second Membership

When a PERS member retires again, a new retirement application must be filed, so that the first allowance may be restored. A second allowance will be calculated based on the second membership. Each allowance will be paid in a different retirement check.

The first and second accounts cannot be combined to qualify for a Veteran Retirement. Service credit from the first and second account may be combined to qualify for enhanced benefits, i.e. 25 years, etc.

You, as the employer should be able to tell members whether any employment they are considering is covered under the PERS, but if questions remain, please contact the Division of Pensions and Benefits.

Returning to Work in a Position Covered by Another New Jersey State-administered Retirement System

In this case the member's retirement allowance continues, and the member can receive salary, but the member cannot become a member of that system.

Disability Retirees Restored to Active Service in the PERS

Before a disability retiree can return to active service in a PERS-eligible title, the following procedures must be followed. The member must:

1. Make a request to the Division of Pensions and Benefits in writing of the desire to return to employment. Submit a physician's report to the Division certifying that he or she is no longer disabled and can return to employment. The physician should be one with the same specialty as the physician who originally certified that the member was disabled.Be examined by a physician appointed by the PERS Board of Trustees.
   
   
2. Be approved for return to active service by the PERS Board of Trustees.

When a disability retiree returns to active service and earns an annual salary that is more that the minimum salary for the original membership tier, an enrollment application must be submitted to the Division. In this case, the original membership resumes, and the balance of contributions in the account is prorated according to the retirement benefit already paid.

Teachers' Pension and Annuity Fund (TPAF) 

IRS Provisions

A TPAF retiree who returns to public employment before age 59½ may be subject to 10 percent additional federal tax withholding for an in service distribution under the Internal Revenue Code. Because this issue is fact sensitive, you should consult with the Internal Revenue Service or a qualified tax consultant and are strongly advised to use caution if considering a return from retirement to public employment.

Bona Fide Retirement

In applying the return to employment provisions described throughout this section, it is assumed that the TPAF retirement is considered to be “bona fide.” This means the retiree has made a good faith action to retire and that the employer/employee relationship is completely severed.

A “bona fide” retirement must also be “due and payable.” A TPAF member's retirement does not become “due and payable” until there has been a cessation of employment of at least 30 days following his or her retirement date, or 30 days following approval of his or her retirement by the TPAF Board of Trustees, whichever is later.

If a retired member returns to a TPAF covered position — on either a paid or voluntary basis — before the 30 days have elapsed, he or she should expect to continue enrollment in the TPAF. The retirement will be considered invalid, and her or she will remain an active employee under your original TPAF account.

Note: N.J.A.C. 17:3-21 requires that employees who work a 10-month school year and retire on July 1 or August 1, must count the 30-day break in service from the start of the following normal school year in September.

Other situations where a retirement may not be considered “bona fide” include, but are not limited to, the following examples:

• If a TPAF member makes arrangements prior to his or her retirement to return to the same or similar public employment as a regular employee, contract employee, leased employee, or an independent contractor, the employer/employee relationship has not been completely severed — regardless of the length of any break in employment — and the retirement will be determined to be invalid. In this case the member would be required to remain an active employee under the retirement system in the new position.

• If the retired member is re-employed or appointed by the same employer to the same or a similar position that would have qualified for continued membership in the retirement system had the retirement not occurred, this may indicate that the employer/employee relationship has not been completely severed and, therefore, the retirement may be determined to be invalid.

In this case the member would be required to remain an active employee under the retirement system in the new position. If the retirement is determined to be invalid (not “bona fide”), the member will be required to reimburse the retirement system for the amount of any retirement benefits received from the date of retirement and be required to pay pension contributions in the form of back deductions going back to the date when that member should have been reenrolled. There is no limitation on the amount of reimbursement that may be recovered by the retirement system in these situations.

Note: The information contained below assumes that the returning retiree has a “bona fide” retirement. If it is established at any time that the retirement was not made in good faith or that the employer-employee relationship was not completely severed, the provisions described below will not apply.

Effect of Post-retirement Employment on TPAF Retirees

(Also see Fact Sheet #28)

Working for private industry, the federal government or a government agency in another state will not normally affect a member's TPAF retirement benefits. (See the "Disability Retiree" section below for exceptions to this rule.) Returning to public employment in New Jersey after retirement could affect retiree benefits.

Returning to Work in a Position Covered by the TPAF

A TPAF retiree who accepts regular full-time employment in a position covered by TPAF must reenroll in the pension fund (see below).

There are significant consequences to reenrollment, as discussed below.

Mandatory Reenrollment

Membership in TPAF is required as a condition of employment if:

• The employee is appointed to a permanent teaching or professional staff position requiring certification and is employed on a regular basis (including per diem and hourly positions) in a position covered by Social Security, and the employee will work at least the minimum number of hours per week required for enrollment (32 hours for State education or local education employees);
  
  
• A TPAF retiree is employed or accepts employment in a TPAF-eligible position as an interim employee and will work at least the minimum number of hours per week required for enrollment (32 hours for State education or local education employees) — except for those who fall under the reenrollment exemption for certificated administrators and superintendents—regardless of the length of service with an employer. *

*Prior to November 3, 2003, local school boards were permitted to appoint a retired Teachers' Pension and Annuity Fund (TPAF) member to any TPAF-covered position on an interim basis—for up to six months—without affecting the individual's retirement allowance, under the rule N.J.A.C. 17:3-2.6. On October 2, 2003, the Teachers' Pension and Annuity Fund Board of Trustees repealed this rule—except for the reenrollment exemptions explained below.

You, as the employer, should be able to tell if the employment the member is considering is covered by the TPAF.

Finally, a TPAF retiree is exempt from reenrollment in the TPAF in two instances:

• A TPAF retiree who is a certificated administrator or a certificated superintendent may accept a certificated position with the Department of Education of the State of New Jersey without reenrollment, as long as the position is determined to be of critical need by the Commissioner of Education. There are no earnings or duration limits upon such appointments.

• A TPAF retiree who is a certificated administrator or a certificated superintendent who accepts a certificated administrator position or a certificated superintendent position (respectively) with a board of education in a position determined to be of critical need by the superintendent of the district, is exempt from reenrollment.
  
  
  

  Such employment taken with a board of education must be on a contractual basis for a period of not more than one year. Upon written request to the TPAF Board of Trustees, this contract may be extended for an additional year, but cannot in any case exceed two years with any individual board of education.

If a member collecting retirement benefits from the TPAF, other than a disability retirement, accepts employment in a position covered by the TPAF, the following steps should occur:You, as the employer, must submit a TPAF Enrollment Application on the member's behalf to the Division of Pensions and Benefits, in a timely manner.

Mentoring and Reenrollment in the TPAF

Recent changes in the state licensing regulations allowed districts to use retired teachers and administrators to serve as mentors for new teachers. As an employer, you need to be aware that such employment could violate the earnings threshold established in statute for the TPAF. Such violations could jeopardize either a retired TPAF member's earnings or benefits and result in a requirement to repay the state for any pension payments made during the employment period.

As explained previously, a retired TPAF member appointed by the State, local board of education, or charter school to a position listed in the definition of "teacher" found in N.J.S.A. 18A:66-2(p), or as a regular full-time or part-time employee in position that meets the following conditions, shall be required to become a member of the TPAF effective as of the date of his/her employment