Arizona’s return-to-work laws let PSPRS, CORP, and EORP 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. But to return to a covered job with the same employer, in most cases they must wait six months (or a full term for elected officials) and have a true break in service—or risk losing pension payments during reemployment.
Employers may have to pay an Alternate Contribution Rate (ACR) when hiring retirees.
Please note that Arizona’s return to work laws will change September 26, 2025, due to legislation passed by the Arizona Legislature and signed into law. This page will be updated to reflect those changes, which were detailed in the PSPRS quarterly newsletter.
TABLE OF CONTENTS
Return to work laws
Public Safety Personnel Retirement System (PSPRS)
- Retirees can return to work for different employers in PSPRS-covered positions after a bona fide separation of service with their previous employer while continuing to collect their pension
- Retirees do not contribute to PSPRS or earn additional credited service
- Employers must pay the ACR when employing public safety retirees in plan-covered positions
- Retirees can return to work for their former employer in a designated position and collect their pension
- Retirees do not contribute to PSPRS or earn additional credited service
- Employers must pay the ACR when employing public safety retirees in plan-covered positions
- Retirees returning to work for their former employer in a PSPRS-covered position will have their pension suspended for the duration of their reemployment
- Retirees who return to work may be required to repay to PSPRS pension amounts collected during their reemployment
- Retirees do not contribute to PSPRS or earn additional credited service
- Employers must pay the ACR when employing public safety retirees in plan-covered positions
PSPRS 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 public employer in a position not covered by PSPRS
- Retirees hired for a position through an open, competitive hiring process at least 60 days after retirement date
- Becoming a fire inspector or arson investigator
- Becoming an elected official through appointment or election
- Returning to work for a different public employer (Effective September 26, 2025)
- Retirees hired as school resource officers (Effective September 26, 2025)
Corrections Officer Retirement Plan (CORP)
- Retirees can return to work for their former employer in a designated position and collect their pension
- Retirees do not contribute to CORP or earn additional credited service
- Employers must pay the ACR when employing corrections retirees in plan-covered positions
- 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
- Returning to work does not add credited service or contributions to the retiree’s pension
- Employers must pay the ACR when employing corrections retirees in plan-covered positions
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
Elected Officials Retirement Plan (EORP)
Members elected/appointed prior to January 1, 2014
- Retirees can return to work in an EORP-covered position and collect their pension
- Retirees do not contribute to EORP or earn additional credited service
- Retirees will have pension payments suspended while holding office
- Any pension payments received in this period (if retired on or after July 1, 2009) are considered overpayments and must be repaid up to the amount received during that term
- Officials’ pension resumes once they leave office
- Retired judges called to active duty by the Arizona Supreme Court
- Retirees returning to work in non-EORP positions with public employers
Members elected/appointed on or after January 1, 2014
- Return to work laws do not apply to participants of the EODCRS, which is a defined contribution retirement plan
Return to work process for employers and local boards
Public Safety and Corrections
The process requires employers to confirm PSPRS and CORP retiree status and their retirement effective dates through the employer portal. Employers must verify the new positions and update retiree demographics as needed.
Local boards must meet to review employers’ return-to-work determinations and whether the ACR is applicable within 10 days. The local board’s determination must be recorded in meeting minutes and sent to PSPRS within the 10-day window. Local board meeting minutes must include supporting documents, such as past and current job descriptions and hiring documentation. Local board determinations are reviewed by PSPRS.
If the local board and PSPRS agree that the retiree qualifies under return-to-work rules:
- The retiree’s pension will continue
- If the retiree is working in a position normally covered by PSPRS or CORP, the employer must pay the Alternate Contribution Rate (ACR)
If the retiree does not meet the eligibility requirements:
- Their pension may be suspended
- The employer may still owe the ACR
Retirees who qualify and are covered by an employer’s active medical or dental plan may also be eligible for a health insurance subsidy. To request this, the employer must submit the Employer Request for Subsidy (Form ER SUB). If approved, PSPRS will send the subsidy to the employer each month.
Elected Officials
Employers of EORP retirees must determine whether the retiree has been retired for at least one elected or judicial term and update their records in the employer portal. Employers of elected officials and members of the judiciary are encouraged to contact PSPRS when hiring EORP retirees. The ACR is applicable if retirees are hired into EORP-covered positions.
Retirees who qualify and are covered by an employer’s active medical or dental plan may also be eligible for a health insurance subsidy. To request this, the employer must submit the Employer Request for Subsidy (Form ER SUB). If approved, PSPRS will send the subsidy to the employer each month.
Returning to work after disability retirement
Returning to work after retiring with disability benefits is possible for PSPRS-plan members who sufficiently recover from debilitating injury or conditions. Statute addresses this occurrence for retirees receiving disability benefits prior to reaching normal retirement eligibility.
- 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 for public safety please check A.R.S. § 38-844(E) and for corrections please view A.R.S. §§ 38-886(D) and 38-886.01(D)
Alternate Contribution Rate (ACR) for employers hiring plan retirees
Employers are required to pay an Alternate Contribution Rate (ACR) when they employ a PSPRS, CORP or EORP retiree. The ACR is only applied for retirees returning to work and exists to reduce potential actuarial impact caused by hiring a retiree in a position that would otherwise be occupied with a contributing member.
The ACR is individually set for each participating employer group and determined each year during the system’s annual actuarial valuation. The ACR is calculated by combining the amortized unfunded liability contribution rates for both the cost of pension and health insurance, with a minimum rate of 8 percent in PSPRS and 6 percent in CORP. Employers can access this information from the Contribution Requirement section in their annual Individual Actuarial Valuation Report. For the EORP ACR, see Elected Officials Plans.
Employers report ACR data and payments using their normal payroll reporting processes to the system. This would include uploading data through the Employer Payroll Portal. Employers who submit late ACR payments are subject to interest.