COUNTY OF SAN MATEO
SUBJECT: Post Retirement Employment
RESPONSIBLE DEPARTMENT: Human Resources
APPROVED: John L. Maltbie, County Manager
DATE: March 19, 2013
If a department is considering hiring a retired County employee either as extra help or through a contract, it is important to become familiar and adhere to the applicable state and federal requirements. Failure to comply may result in the termination of the employee’s extra help status or contract.
SamCERA has forms to be completed by safety and general retiree members who are being considered for an extra help or contractor position. Departments should give the applicable form to the retiree, review the responses, complete its portion of the form and send a copy of it to SamCERA. These forms and instructions are available on SamCERA’s website: www.samcera.org.
If the department will be rehiring the retiree as a full time County employee and the retiree will be “unretiring,” then the restrictions summarized below do not apply.
State Law Requirements
The state statutory restrictions are as follows:
- SamCERA retirees shall not serve, be re-employed by, or be employed through a contract directly by the County except:
- During an emergency to prevent stoppage of public business.
- When the retiree has skills needed to perform work of limited duration.
- SamCERA retirees are not eligible for such re-employment if the retiree received any unemployment insurance compensation arising out of prior employment during the 12-month period prior to reemployment. Human Resources can give the department the date when the retiree will become eligible for rehiring.
- SamCERA retirees are not eligible to be re-employed for a period of 180 days following the date of retirement unless one of the following criteria applies:
- County certifies that the re-employment is necessary to fill a critically needed position before 180 days has passed and the appointment has been approved by the Board of Supervisors. (Not on a consent calendar.)
- The retiree is a “safety officer.”
- If the SamCERA retiree accepted a retirement incentive (e.g., extra service credit/ “golden handshake”), the retiree is subject to the 180-day break in service requirement, without exception.
Internal Revenue Service Requirements
The requirements of the Internal Revenue Service (IRS) for working after retirement must also be satisfied. SamCERA regulations address the IRS restrictions, and provide:
- A SamCERA retiree who retires at an age younger than normal retirement age must have at least a 90 -day break in service, even if the retiree falls under an exception to the state law requirement of a 180-day break in service. The only exception to the 90-day break in service requirement is if such reemployment is to respond to an emergency declared by a government agency or an emergency that may prevent the stoppage of public business.
- The normal retirement ages are: 60 for general members; 53 for safety members
- A SamCERA retiree who retires at an age younger than normal retirement age cannot have a prearranged agreement, either oral or in writing, to return to work for the County.
- The prohibition against prearrangement of post-retirement employment applies regardless of the period of separation between retirement and re employment.
Additional State Law Requirements During the Re-employment Period
If the above requirements are adhered to and the retiree is hired as extra help or a contract is entered into, there are two requirements that must be adhered to during the period of service:
- The retiree cannot provide more than 960 hours of service during each fiscal year.
- The hourly rate of pay must be within the salary range of employees performing comparable duties.
Both the County and SamCERA retirees are required to follow these requirements. SamCERA will be of assistance to both the County and its members. Should SamCERA or the County identify a retiree who did not meet the applicable separation period prior to post retirement employment or who exceeds the 960 hours of service, and/or receives an out-of-range hourly pay rate, the County will notify the retiree that such post-retirement employment is terminated for an appropriate time period reflective of the facts that each situation presents.