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Employment After Retirement Brochure

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Employment After Retirement Brochure Employment After Retirement For members enrolled in the Defined Benefit Plan Defined Contribution Plan Combined Plan 2021|2022 DEFINEDReemployment BENEFIT, DEFINED CONTRIBUTIONOverview OR COMBINED PLAN Table of Contents STRS Ohio retirees may choose to be reemployed after retirement. This brochure provides information Reemployment Overview ......................................................1 about the rules and regulations associated with Filing for service retirement .......................................................1 reemployment and your service retirement benefit. If you are considering any type of reemployment One-day break in service ............................................................1 after retirement, please review this brochure carefully. Returning to Ohio public employment ...................................2 It explains restrictions on reemployment, potential Single employer .........................................................................2 benefits forfeited, primary and secondary employment, and the reemployment benefit, as well as important Multiple employers ....................................................................2 information about health care eligibility during Forfeiting retirement benefits: violations and penalties .............3 employment after retirement. Reemployment benefit .........................................................4 Ohio law may require public notice if you are Important tax considerations .....................................................5 returning to a position with the employer from which you retired; please contact your employer for details. Contributions made during two-month waiting period .............5 Required minimum distribution .................................................6 Filing for service retirement Annual Statement of Account ......................................................6 You must terminate employment from your highest Apply for benefits .......................................................................6 paying Ohio public employer to be eligible for retirement benefits. If you plan to retire with STRS Employed retiree health care ................................................7 Ohio and return to Ohio public employment, Verification process ....................................................................7 STRS Ohio must receive your Service Retirement Application before your reemployment begins. Definitions ................................................................................. 7 Scenarios ...................................................................................8 One-day break in service Employment and Medicare enrollment ....................................11 To be eligible for service retirement, there must be a STRS Ohio Resources ............................................................12 minimum one-day break in service between the last day of employment as an active member and the first day of employment as a reemployed retiree. This one day must be the last workday of the month before the service retirement date or the first workday of the retirement month. The one-day break must be a normal workday and cannot be a Saturday, Sunday or holiday. • For example, if your service retirement date is July 1 and: — Your last paid workday is between June 1 and June 29, the first day you can return to work to be eligible to retire will be July 1 (as long as June 30 is a normal workday). — Your last paid workday is June 30, the first day This brochure is a summary written in plain language for use by STRS Ohio you can return to work to be eligible to retire members. It is not intended as a substitute for the Ohio Revised Code or the will be July 2 (as long as July 1 is a normal Ohio Administrative Code or for any state or federal law or regulation, nor workday). will its interpretation prevail should a conflict arise between it and any law or regulation. More information may be obtained by contacting STRS Ohio Working during the first two months of retirement toll-free at 888-227-7877. may cause you to lose retirement benefits. See the next section for additional details. www.strsoh.org 888-227-7877 1 DEFINED BENEFIT, DEFINED CONTRIBUTION OR COMBINED PLAN DEFINED BENEFIT, DEFINED CONTRIBUTION OR COMBINED PLAN Returning to Ohio public employment If your secondary employer is covered by OPERS or SERS, then you must also combine that account Single employer with your STRS Ohio account at retirement to avoid If you are employed by only one Ohio public a forfeiture of benefits. You may have more than one employer at the time of retirement, you must wait secondary employer. The “one-day break in service” two months after your retirement date to return to referenced on Page 1 does not apply to employment public employment. Public employment during the with a secondary employer. first two months will result in the loss of one or two months of retirement benefits. Forfeiting retirement benefits: violations If you are reemployed within the first two months and penalties of retirement or continue in the same position If you choose to work in a public position with your as a nonpaid volunteer, you will be in violation primary employer or a new employer within the of the two-month waiting period and will forfeit first two months of retirement, you will forfeit your monthly benefits for any month in which you are monthly retirement benefits for the months worked. in violation. If you volunteer, you may never be The amount a Defined Benefit Plan or Combined paid for the services rendered during the volunteer Plan participant forfeits by violating the two-month period. Simply deferring payment until later will not waiting period is the Single Life Annuity monthly eliminate the violation. Please review “Forfeiting benefit calculated before the reduction for a Partial retirement benefits: violations and penalties” on Lump-Sum Option Plan (PLOP) payment and a Page 3 for further information. Joint and Survivor Annuity or Annuity Certain (if selected). The amount a Defined Contribution Plan Multiple employers participant forfeits is the Single Life Annuity benefit (Defined Benefit Plan members only) calculated before the reduction for a Joint and Survivor Annuity or Annuity Certain (if selected). If you are employed at the time of retirement The difference between the actual plan of payment by more than one employer covered by STRS selected and the Single Life Annuity (or pre-PLOP Ohio, Ohio Public Employees Retirement System Single Life Annuity) will be deducted from future (OPERS) or School Employees Retirement System monthly benefits. (SERS), you may retire with the highest paying (primary) employer and continue to work with one or Retirees who work during the two-month waiting all of the lower paying (secondary) employers with period may still be eligible for health care coverage no waiting period. To be eligible to continue to work during the period benefits are forfeited. (See with a secondary employer, you must have worked Page 7 for infor mation regarding “Employed and earned compensation from that employer for retiree health care.”) If you are enrolled in medical/ each of the 12 months before and in the month of prescription, dental or vision coverage, monthly retirement. premiums will be billed to you directly. Monthly premiums for the optional retiree-funded death For example, if your retirement date is July 1, 2022, benefit will be deducted from a future benefit you must be working in your secondary position in payment. July 2021 and continue to work in each of the next 12 months into July 2022. A secondary employer is defined as any STRS Ohio, OPERS or SERS employer with which you earned less compensation than you earned with your highest paying employer (in that fiscal year or in the previous 12-month period) and you are continuing employment with that employer in the first month of retirement. 2 www.strsoh.org 888-227-7877 3 DEFINED BENEFIT, DEFINED CONTRIBUTION OR COMBINED PLAN DEFINED BENEFIT, DEFINED CONTRIBUTION OR COMBINED PLAN Reemployment benefit Lump-sum payments can be: Members continuing public employment after • Paid directly to you, or retire ment and their employers both contribute to • Rolled over to a qualified plan. the appli cable Ohio public retirement system. These contributions fund a benefit that you may collect as a Upon your death, survivors receive a lump-sum lump-sum payment the first of the month following payment of any unpaid funds. Individuals con tin uing your last day of service or 12 months after the employment after retirement are not eligible for any payment of a previous reemployed retiree benefit other benefits. payment, whichever is later. Before benefits are payable, you must terminate employment. Important tax considerations Interest begins to accrue in the fiscal year following If you choose to withdraw your STRS Ohio account, deposit. For example, interest on 2021–2022 there are important tax implications. contributions would begin accruing July 2022 and If you choose to have your withdrawal paid directly would be payable August 2022 or later. No interest to you: is payable if you withdraw your account in July and contributed for only the year just ended. Interest • Your payment will be taxed in the year in which is calculated only for the time contributions were it is issued. on deposit and terminates at age 65, your last day • STRS Ohio will withhold federal tax at a rate of service or 12 months after payment of a prior of 20%. benefit, whichever
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