Working After You Retire

If you retire under the regular age and service provision (not under a disability), you do not need to report any wages or earnings unless your employer is a member of the Michigan Public School Employees Retirement System.

If you return to work and earn wages from a participating Michigan reporting unit (a school, college, university, or library that is a member of this retirement system) you may be subject to employment restrictions or earnings limitations as explained below. 

Employment restrictions.

You may not work within the first month of your retirement effective date (even as a volunteer) for a participating reporting unit. (Note : If you anticipate working for the state of Michigan in the first month of your retirement effective date, additional restrictions could apply. Contact ORS for details before completing your retirement application.)

If your pension is based on a disability, contact ORS before you accept employment because special restrictions apply. 

Earnings limitations.

If you do return to work for a reporting unit, you may earn the greater of the statutory limits listed below without affecting your pension.

• One-third of your final average compensation. For this purpose, the salary average is increased by 5 percent (compounded) for each calendar year you are retired. In the first year of retirement, the earnings limitation is prorated.
• The earnings limit for someone your age whereby full benefits are payable under the federal Social Security Act, as amended. There is no limit on earnings beginning the month you attain social security full retirement age (FRA).

For every dollar you earn over the annual statutory limit, you must return one pension dollar to the retirement system.

Exceptions to the earnings limitation.

There are no limitations on postretirement earnings from:

• Employment of a former teacher or administrator in a teaching or research capacity by a university that is considered a reporting unit. These include Central Michigan University, Eastern Michigan University, Ferris State University, Lake Superior State University, Michigan Technological University, Northern Michigan University, and Western Michigan University.
• Public school employees who have been retired for at least 12 months may be exempt from the earnings limitation if they are working in an approved critical shortage position or for a school that has an approved emergency situation. The earnings are exempt for up to six years or until July 1, 2011, whichever comes first. The list of critical shortage exceptions is published by Michigan's Department of Education (MDE). To see the list, navigate to Teacher Shortage Memo at MDE's website.

If you return to work for a participating public school, it is your responsibility to inform your employer of your retiree status. Reemployment does not change your retiree status, so neither you nor your employer will make contributions to the retirement system. However, after three years full-time employment (five years if you're a Basic Plan retiree), you may request to pay those contributions and repay all pension payments received during the reemployment period and have your pension recalculated.

Your eligibility for the group health insurances is not affected by your earnings. However, if your pension is suspended because your earnings exceed the limitation, your insurance coverage will also be suspended. You can request a continuation of insurance; you will be responsible for 100 percent of the monthly premium.