Retire/Return to Work:

Passage of Retire-Rehire Bill Comes Down to the Wire:

Governor Easley signed House Bill 956, re-employing retired teachers, minutes before midnight on Tuesday night. The retirement law requires individuals who retire after October 1, 2007 to do one of the following:
1- Have 30 years of service: no age restrictions
2- Have 25 years or service: must be 60-years old
3- Have 5 years of service: must be 65-years old

In addition, a six-month break in service must occur before re-employment.

All retirees previously employed under the retired teacher option are grandfathered under th eold law and can continue public school employment without meeting the new criteria.

Retiree Return To Work Legislation Hits Snag In House:
Katherine Joyce, NCASA Assistant Director

Legislation to change the law governing the re-employment of retirees failed to clear the House Pensions Committee on Wednesday. The committee voted 4-5 on House Bill 237, Retirees Returning to Work, after a lively debate on the need to shorten the six-month break in service that is now required before a state retiree may re-enter the workforce in public schools or state agencies.

The bill’s main sponsor, Rep. Rick Glazier, D-Cumberland, told the committee that the six-month break is deterring veteran employees from going back to work in public schools, community colleges and universities. In addition, this break is excessive in comparison with those required for retirees in other states, and the Internal Revenue Service has not indicated that a break of this length is necessary for the Teachers’ and State Employees’ Retirement System to retain its tax-exempt status, he said.

Spokesmen for groups representing public schools and universities joined Glazier in urging the committee to approve H237, which would reduce the six-month break to the normal break between school years plus 25 working days (approximately five weeks). For 10-month teachers, the new break requirement would be just over three months under this proposal. The legislation also would set a normal retirement age of 60 and would allow anyone who reaches that age to return to work immediately after retirement with no break in service, as allowed under federal tax regulations.

Some committee members raised questions about the proposal, however, after they received some inaccurate testimony indicating that the bill excluded state employees from this proposal. The bill, while requested by the state’s education sector, also would provide retirees of various state agencies with a shorter break in service after retirement.

After the vote, Committee Co-Chairman Jim Harrell, D-Surry, announced that he would seek to initiate a subcommittee to study this issue and possibly bring a revised proposal back before the committee.

NCASA, which is one of the groups that supports H237, will keep our members updated on additional actions on this issue.

2006 History of Return to Work Legislation:
The Retire Return to Work Subcommittee of the Joint Legislative Education Oversight Committee met on April 24th. Representative Glazier proposed an amendment change to have those exempt from the earnings cap to also have a 25 plus gap break in service, instead of the 91 days originally stated. All educational gropus agreed and supported this change.

Under the new recommendations those subject to the earnings cap are broken up into two groups.
1- Those who retire at or are older than 60 and have 25 years of service or 65 and older with 5 years of service:
- Allow pre-termination agreements
- Do not require a break in service

2- Those who retire under the age of 60 and have 25 years of service or 65 and older with 5 years of service:
- Prohibit pre-termination re-employment agreements
-Require a break in service of 25 working days (calculated based on the actual annual work calendar for that employee for the twelve months prior to retirement- example: 10 month employee's break would be 2 months plus 25 days).

Public school classroom teachers who are exempt from the earnings cap must have a break of 25 days + gap. The new language will also clarify that a teacher mush have a one-time break in service after retiring and before returning to work full time, but that it does not have to be immediately preceding the effective date of re-employment.

Please understand that all these recommendations are still in committee. We are excited about the positive turn that this committee has taken with addressing the 2005 law.

NCASA Retire/Return to Work Summary