Good-Faith Separation of Service
IRS Code and IRS regulations require a true separation from employment for OPERS members to receive retirement benefits in good faith. Pre-arranged employment agreements between retiring members of OPERS and their previous employers are not considered a good-faith separation. State law was passed to make pre-arranged rehiring less likely. The bill prevents a retiree from returning to work with the same agency for a period of one year unless the member waives the receipt of their OPERS retirement benefit and returns to work as a regular employee. This applies to performing services under contract with the same employer also.
Re-enrolling in OPERS
Members who decide to return to work for an OPERS participating employer may do so any time after the first month of retirement. Those returning to work for a participating employer must participate in OPERS by paying retirement contributions no matter how many hours they work or the nature of the work (temporary, seasonal, permanent, etc.). Retirees continue to accrue service credit while they work for a participating employer, and the additional credit may increase their retirement benefits.
Upon returning to work, the retiree must complete a form entitled Post-Retirement Employment and choose either to (1) continue receiving retirement benefits, or (2) waive the receipt of benefits while employed. The rules governing retirees returning to work are addressed below.
Independent contractors do not participate in OPERS, but before a participating employer hires an OPERS retiree as an independent contractor, they must submit a copy of that contract to OPERS for review. The determination of whether or not an employee is an independent contractor for the purpose of participation in OPERS will be made solely by the Oklahoma Public Employees Retirement System.
Receiving OPERS Benefits While Working
OPERS retirees may return to work after they retire and continue to receive their retirement benefits. However, if a member returns to work for an OPERS participating employer, they may be subject to a federal earnings limitation depending upon their age.
The federal earnings limitation applies only to OPERS retirees who meet both of the following conditions:
- The retiree returns to work for an OPERS participating employer; and,
- The retiree is younger than full, normal retirement age set by the Social Security Administration (SSA).
The 2017 earnings limitation is applied in the following manner:
- If an OPERS retiree will remain below the SSA full retirement age for the entire 2017 calendar year, their federal earnings limit is $16,920.
- If an OPERS retiree will reach their SSA full retirement age in 2017, their earnings limit is $44,880 up to the date they reach full retirement age.
|Social Security - Normal Retirement Age |
|Year of Birth ||Age|
|1937 and prior ||65|
|1938||65 and 2 months |
|1939||65 and 4 months |
|1940||65 and 6 months |
|1941||65 and 8 months |
|1942||65 and 10 months |
|1955||66 and 2 months |
|1956 ||66 and 4 months |
|1957||66 and 6 months |
|1958||66 and 8 months |
|1959||66 and 10 months |
|1960 and after||67|
|Note: Persons born on January 1 of any year should refer to the normal retirement age of the previous year.|
When a retiree’s salary exceeds the allowable amount, benefits will not be paid for the remainder of that calendar year or until employment terminates, should termination occur before the end of the calendar year. The retiree will begin receiving benefits again in January of the following calendar year. Just as before, the benefits will continue until their salary meets the allowed earnings for that year.
Each month a retiree works for a participating OPERS employer and contributes to OPERS, the retiree accrues post-retirement service credit. Benefits are increased in January of each year for those retirees who have accrued 12 months of service (2,076 hours) as of June 30 of the previous calendar year. Any hours which exceed 12 months will be retained in your record to be added to future post-retirement credit. Increased benefits are based upon the actual compensation earned and actual hours accrued with the participating employer during post-retirement employment.
By state law, the earnings limitations for retirees that have returned to work with an OPERS participating employer are linked to the amounts allowable as wages or earnings by the Social Security Administration in any calendar year. The information above is based upon the amounts established by the Social Security Administration. The full retirement age will increase over time.
Waiving OPERS Benefits While Working
A retiree can decide to stop receiving his or her retirement benefits completely while employed with a participating OPERS employer. In such a case, no earnings limitations apply and the retiree may retire for a second time after accruing the equivalent of 36 consecutive months of full time service credit (6,228 hours). All of the retiree’s service credit (before and after retirement) will be recomputed based upon the law governing this System at the time of the retiree’s second retirement. When the retiree retires the second time, he or she may also reselect a retirement option. Retirees who return to work and waive their benefits but do not work the 36 months required to re-retire are entitled to have their benefits increased under the method used for retirees who received benefits while working.
IMPORTANT: Members selecting the Medicare Gap Benefit Option may not waive benefits and retire a second time.
Last Revised - November 4, 2016