Arizona’s return-to-work laws let CORP retirees go back to work, but with limits to protect pension funds and follow federal rules.
Retirees can work in the private sector or in public jobs not covered by PSPRS plans with no pension impact. In most cases, retirees must wait six months and have a true break in service before returning to a covered job with the same employer – or their pension payments may be suspended. Pre-arranged agreements to return to work are prohibited under state law.
Retirees do not contribute to CORP or earn additional credited service when returning to work. Employers may have to pay an Alternate Contribution Rate (ACR) when hiring retirees.
Returning to work after retirement
- Retirees can return to work for their former employer in a designated position and collect their pension
- Retirees returning to work in designated positions with former corrections employers within six months of retirement will have pensions suspended
- Retirees who return to work may be required to repay CORP pension amounts collected during their reemployment
CORP retirees can return to work within six months of their retirement and continue to receive their pension under the following conditions:
- Returning to work for a different public employer
- Returning to work for former employers in a non-designated CORP position
- Becoming an elected official through appointment or election
- The local board for the retiree’s employer will review according to statutory provisions for disability review and determine eligibility to return to work
- Retirees on disability pension (who are ineligible for normal retirement) will have their disability benefits terminated if they return to work in a covered position
- Retirees previously receiving disability benefits will resume contributing and accruing credited service towards a normal retirement when they return to work
- NOTE: Retirees may have their disability pension terminated through periodic disability review by the local board. For details please view A.R.S. §§ 38-886(D) and 38-886.01(D)
Return to work process for employers and local boards
Employers are required to confirm CORP retiree status and retirement effective dates through the employer portal. Employers must verify the new positions and update retiree demographics as needed.
Local boards must review employers’ return-to-work determinations and whether the ACR is applicable within 10 days and notify PSPRS.
Employers must submit the Employer Request for Subsidy (Form ER SUB) for retirees who are covered by an employer’s active medical or dental plan. If approved, PSPRS will send the subsidy to the employer each month.
More information is available on the Hiring Retirees page.