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Texas Payroll/Personnel Resource

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Retired State Employees Who Resume State Employment

Background

Several provisions have been adopted by the Legislature that affect retired state employees who subsequently resume state employment. This document describes the effect and provides guidance for the reemployment of retired state employees.

Waiting Period Before Reemployment After Retirement

Employees Retirement System (ERS)

Employees who retire from ERS on or after May 31, 2009, may not be reemployed in an ERS-eligible position until 90 days after the retirement date.

Teacher Retirement System (TRS)

Employees who retire from TRS on or after Jan. 1, 2011, may not return to full-time employment in a TRS-eligible position within the 12 consecutive months following the retirement date. Otherwise, the employee will forfeit his or her retirement annuity for the month in which the work occurs.

Retirement Deductions

ERS

ERS retirees who return to work at an agency subject to ERS will no longer contribute a portion of their monthly pay to an ERS retirement account. Therefore, they are not eligible to receive a second retirement from the ERS.

Agencies that hire a person who retires under ERS rules on or after Sept. 1, 2009, will pay a surcharge to ERS equal to the amount that the state would pay for an active member employed in the position for each month the return-to-work retiree is employed by the agency. The percentage is equal to the current state contribution at the time of payment. There are no appropriations for this surcharge.

Exception: Agencies are allowed to use funds appropriated by Senate Bill 30, Section 9.01, 88th Legislature, Regular Session and House Bill 1, GAA, Article IX, Section 17.16, 88th Legislature, Regular Session for the portion of the surcharge related to the salary increases authorized by those acts.

The ERS retirement annuity will not be affected for employees returning to state employment after they retire.

TRS

TRS retirees who return to work at an agency subject to TRS will no longer contribute a portion of their monthly pay to a TRS retirement account. Therefore, they are not eligible to receive a second retirement from the TRS.

Agencies and institutions that hire a person into a TRS-covered position who retired under TRS rules on or after Sept. 1, 2005, are required to pay a pension benefit surcharge to TRS. The amount of the pension surcharge is equal to the amount of both member and state contributions on the compensation paid to the employee.

Regular employment that is half-time or more is covered by TRS. Regular employment is employment that is expected to last four and one-half months or more.

Employment not covered by TRS and not subject to the surcharges includes:

  • Substitute service
  • Temporary employment (employment expected to last fewer than four and one-half months)
  • Less than half-time employment (even as little as one hour less than half-time prevents the surcharge payment)

Source

Texas Government Code, Sections 659.044(f), 659.042, 659.126(d), 661.152(l), 812.201, 812.202, 812.205, 812.206, 824.602, 825.4092.