Step 1: the 45-day wait
For at least 45 days after your retirement date you may not be reemployed on a permanent, temporary or contractual basis by the State or any SRPS participating employer (even one that has withdrawn). ACPS Handbook p. 29, Reemployment; SPP §23-407(d)
Step 2: the earnings limit
Your limit = your average final compensation − your yearly Basic Allowance. Earn more than that in a year and your pension is cut $1 for every $1 over. ACPS Handbook pp. 29-32, Reemployment, Earnings Limitation, Reemployment at a Glance; RCPB Handbook pp. 27-30
Normal service or vested retirees reemployed by the same employer they worked for before retirement (all units of State government, including the University System of Maryland, count as one employer). Early service or early vested retirees: any participating employer during the first 12 months of retirement, then only the same employer. ACPS Handbook pp. 29-32, Reemployment, Earnings Limitation, Reemployment at a Glance; RCPB Handbook pp. 27-30
Our example, using the handbook's normal-retirement figures. SRA tells you your own limit when you retire.
No limit if any of these apply
- Retired with a normal service or vested allowance for more than 5 years, counted from January 1 after the retirement date (a January 1 retirement starts the count that day)
- AFC at retirement less than $25,000
- Serving in an elected position as an official of a participating governmental unit, or as a constitutional officer of a participating county
- Retired teachers or principals meeting certain guidelines and returning to certain positions in certain schools
- Grant-funded State positions with no State funds, when the last employer was also a State unit
If your AFC was under about $25,000 you may be exempt from the earnings limit; SRA lists your exact limit when you retire.
What we use: $25,000.
Rehired teachers and principals
No earnings limit for a retired TPS teacher rehired as a classroom teacher, substitute or teacher mentor in a qualifying public school (in need of improvement, Title I, more than 50% free/reduced-price meals, or an alternative program) or the Maryland School for the Deaf, teaching in an area of critical shortage, special education, or limited English proficiency; or a retired principal rehired as a principal in such a school. Performance verifications are required, and the exemption lasts at most 5 consecutive years. Each superintendent may also rehire up to five TPS retirees in any position. SRA web: Maryland Retirement Law on Reemployment; SPP §23-407(c)(4)(iv), (v), (ix), (5)-(8)
Other rules
- While reemployed by a participating employer after a service or vested retirement you earn no service credit and pay no member contributions.
- The reduced allowance must still cover approved medical insurance premium deductions.
- Retiring before the plan's normal retirement age and/or before 59 1/2 and returning to the same employer without a bona fide separation from service can bring IRS tax penalties for you and tax consequences for the SRPS.
Disability retirees
- Earnings limit until normal retirement age (62 ACPS / 65 RCPB): AFC + $5,000 (CPI-adjusted) - annualized Basic Allowance; reduced $1 for every $2 over the limit, $1 for every $5 after 10 years of retirement; exempt from January 1 of the year you reach normal retirement age.
- No earnings limit, but suspension can apply.
- Ordinary or accidental disability allowances may be suspended if you are under normal retirement age, began disability retirement on or after July 1, 1998, and earn at least your AFC from a participating employer.
What the sources say
- You must wait at least 45 days after retiring before working for the State or any SRPS participating employer in any capacity.ACPS Handbook p. 29, Reemployment; SPP §23-407(d)
- If you go back to the same employer, your earnings limit is your AFC minus your yearly Basic Allowance; your pension is cut $1 for each $1 over. Early retirees face the limit with any participating employer for the first 12 months.ACPS Handbook p. 30, Earnings Limitation
- The earnings limit no longer applies once you've been retired five years (counted from January 1 after you retire), if your AFC was under $25,000, or for certain rehired teachers and principals.ACPS Handbook pp. 30, 32; SRA web: Maryland Retirement Law on Reemployment
- Rehired retired teachers have no earnings limit if they teach in a qualifying school (such as Title I or more than half of students on free/reduced-price meals) in a critical-shortage area, special education or English learners, with good performance reviews, for up to 5 consecutive years. Each superintendent can also rehire up to five TPS retirees in any position.SPP §23-407(c)(4)(iv), (5), (7), (8); SRA web: Maryland Retirement Law on Reemployment
- While reemployed you earn no new service credit and pay no contributions.ACPS Handbook p. 30
- Check with SRAThe handbook's $25,000 AFC exemption is written in the law as the minimum salary on the State pay scale.SPP §23-407(c)(4)(i); ACPS Handbook p. 30Handbook and statute word the threshold differently.
Questions
How soon can I go back to work?
Not for at least 45 days after your retirement date, in any job with the State or an SRPS participating employer.
Is there an earnings limit?
Yes, if you go back to the same employer within your first 5 years of retirement. The limit is your average final compensation minus your yearly pension. Your pension drops $1 for each $1 you earn over it.
Who doesn't have a limit?
Retirees who've been retired more than 5 years (counted from the January 1 after retiring), those whose average final compensation was under $25,000, and certain rehired teachers and principals.
Do I earn more service while rehired?
No. You don't pay contributions or earn new service.
Source: SRPS Benefits Handbooks: Teachers' Pension System (Alternate Contributory Pension Selection; Reformed Contributory Pension Benefit), Revised April 2021, ACPS Handbook pp. 29, 30, 31, 32; RCPB Handbook pp. 27, 28, 29, 30; SPP § 23-407; SRA web pages. Last reviewed .