Before you hire a public retiree, you should be aware of the laws governing how much retirees can earn in post-retirement employment without affecting their pension.
- For all public retirees, earnings are limited if they are returning to public employment in New York State. Public employment includes:
- State of New York
- Political subdivision — county, city, town, village, school district, BOCES, etc.
- Public authorities
- For service (not disability) retirees, earnings are not limited for:
- Private employment
- Another state or one of its political subdivisions
- Federal government employment
- For disability retirees, each retiree has an individual earnings limit. Earnings may be limited for both public and private employment. Contact our Post-Retirement Employment Unit for information:
- By phone: 518-474-4449
- By email: [email protected]
Except for certain elected officials (see Limits for Elected Officials), earnings are no longer limited during and after the calendar year in which a retiree turns age 65.
Section 212 (RSSL)
Under Section 212, there is a calendar-year limit on a service retiree’s earnings from public employment.
- The current limit is $35,000 (effective January 1, 2020).
- The limit is established by law and may be revised by legislation. Retirees can find details in our publication, What if I Work After Retirement?.
If a retiree earns more than the Section 212 limit, he or she must pay back to NYSLRS an amount equal to the pension payments received after the limit was reached. If the retiree continues to work, pension payments will be suspended for the remainder of the calendar year. Pension payments will resume the following January.
Section 212 employees are not active members and do not receive service credit for their public employment.
Section 211 (RSSL)
Under Section 211, earnings from public employment are not limited for a retiree receiving a pension payment if:
- The retiree returns to work for a public employer that has obtained the necessary Section 211 approval (also referred to as a Section 211 waiver), and
- The public employer is not a “former employer.” A former employer is any public employer that paid the retiree a salary or compensation during the last two years before retirement and the pension was based, in part, on that salary and/or service.
Earnings from work for a former employer are subject to a set limit — the difference between the Single Life Allowance (Option 0) and final earnings. If a retiree earns more than the limit, we will recover any pension overpayment and/or suspend pension payments.
Retirees are also prohibited from returning to work under Section 211 in the same or similar position for one year following retirement (effective October 7, 2008). This does not affect a retiree’s ability to return to public employment under Section 212.
Obtaining Section 211 Approval
As the retiree’s prospective employer, you must submit a request for Section 211 approval of employment to the appropriate agency. In most cases, this is the New York State Civil Service Commission. A link to their Section 211 Application is available on our Forms page.
However, one of the following agencies may need to grant approval:
- The New York State Commissioner of Education
- The Chancellor of the State University of New York
- The Chancellor of the City University of New York
- The Chancellor of the New York City Department of Education
- The New York City Division of Citywide Personnel Services
- The Office of Court Administration
When requesting a waiver, you must prepare a detailed recruitment plan and show either that:
- There is an urgent need as the result of an unplanned, unpredictable and unexpected vacancy, where sufficient time is not available to recruit any available non-retired personnel, or
- Extensive recruitment efforts did not find any available qualified non-retired persons.
The hiring must also be considered temporary, rather than a final filling of the position.
Employment may begin after you receive approval. Approval is granted for a specific period of time, up to a maximum of two years, after which time you may request a renewal.
Section 211 employees are not active members and do not earn service credit for their public employment.
Note: Any reemployment in public service that does not comply with the requirements of Section 211 and/or 212 may result in the reduction or suspension of the retiree’s pension.
Rules and Laws that Apply to Returning to Work for the Same Employer
In order to retire, a member must have a bona fide termination and be removed from payroll before the effective date of retirement. This is required by IRS rules and the Retirement and Social Security Law (RSSL). The date of retirement must be at least one day after the last day that the member was on payroll and earned salary.
Whether a termination has occurred is based on whether facts indicate that the employer and employee reasonably anticipated that no further services would be performed after the retirement date. Where it is expected that the employee will return to employment after the date of retirement, or where a member is retained on the payroll and paid for services past the date of retirement, there is no termination and the service retirement will be voided. Any pension amounts paid in error due to the fact that a retirement was invalid will be recovered by the Retirement System.
Under RSSL Sections 211 and 212, employers may employ retirees with certain limitations. Notwithstanding these sections however, a prearranged agreement to rehire the employee risks the separation not constituting a bona fide termination. Any questions related to this should be directed to NYSLRS.
Limits for Elected Officials
If a retiree is elected or appointed to a position he or she did not hold before retirement, earnings are not limited and will not affect the pension.
Example: A member retired from a full-time school bus driving job a year ago and is collecting a pension. This year, the member was elected to city council. The council member salary is not limited and will not affect the pension.
If a retiree continues to work in the same elected position held before retiring, and:
- The retiree’s date of membership is on or after July 26, 1995, the Section 212 limit applies to earnings regardless of age.
- The retiree’s date of membership is before July 26, 1995, the Section 212 limit applies to earnings only until age 65.
School districts and BOCES who report using legacy reporting need to report retirees.
- School districts and BOCES must notify us of any retired employee who returns to work and exceeds the Section 212 limit.
- School districts and BOCES must annually certify any retired employees who return to work regardless of their income.
Additional information is available on our Post-Retirement Reporting page.
If you use Enhanced Reporting, you already report all employees — those who are members of NYSLRS and those who are eligible to join. This includes retirees who retired from any of the New York State public retirement systems. Be sure to read our Tips and Tricks for hiring a retiree in the Resources section of our Enhanced Reporting page.
Restoring a Membership
If a retiree from one of the New York State public retirement systems returns to public employment, he or she may suspend their pension and restore their membership under Section 101 or 401 (RSSL).
- The retiree can rejoin the system from which they retired or one of the other New York State public retirement systems.
- The retiree’s tier in the new system will be based on their date of membership prior to retirement.
Restoring membership is complicated. Retirees should understand the potential consequences before they restore. For example, a retiree’s pension may not increase when they retire again, and a new retirement date can delay cost-of-living adjustments (COLAs). Depending on the circumstances, a retiree may need to repay pension payments received with interest before they re-retire.
If a retiree is considering restoring their membership, please urge them to contact us to discuss their situation and options, and how restoring could affect their pension.
Death Benefits for Tier 1 and 2 Retirees
Tier 1 and 2 retirees must have one year of service after restoring their membership to be eligible for an active member death benefit. These retirees may choose to either:
- Defer NYSLRS membership for one year. If a retiree selected a payment option at retirement that pays a benefit to a beneficiary, and the retiree dies during the deferral year, the benefit will still be paid. The retiree will receive credit for service during the year, upon enrollment.
- Join the appropriate retirement system on the date employment begins. Retirees who did not select a payment option that provides a benefit to a beneficiary may wish to join immediately.
If a restored retiree defers membership, you will need to enroll them when the deferral year has ended. We will mail the retiree a membership application just prior to the end of the year. The retiree should enter their information, and then forward the application to you so you can complete the enrollment.