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Can a person work after "retiring" and receiving a pension?

For example, in Illinois public workers are eligible to "retire" at age 59 and receive 75% of their salary at the time. So, for example, a school superintendent making $268,000 a year, can "retire" and immediately start drawing a pension of $200,000 for their rest of their life that automatically goes up 3% every year for "inflation" (even if the money supply is deflating).

Can the superintendent then just apply to another school system and become a principal or superintendent somewhere else and then make another $250,000 on top of the $200,000 they are already drawing as a pension?

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    Possibly more a legal question than personal finance, but this page suggests it's generally OK along the lines of D Stanley's answer. – Peter K. Mar 12 '18 at 14:47
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    I'm voting to close this question as off-topic because It seems like more of a rant against how unfair it is that people get things they don't deserve. It's not a question about the poster's personal finances. – Kate Gregory Mar 12 '18 at 15:35
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    There's nothing inherently wrong with asking questions relating to a politically charged topic, but care should be exercised to keep statements factual. As long as the answers can be applied individually (Can I work another job after I applying for my pension?) this seems to be on-topic for this site. If you feel there are extraneous ranting words in the question, edit them out. The worst case scenario is that the OP rolls your edits back, and we take it to meta. – Nathan L Mar 12 '18 at 16:42
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    From what I've heard, it's common in the military. Serve your 20 years, retire with 60% pay, and switch to the military contractor side and get paid way more +60% for the same work. – Kevin Mar 12 '18 at 18:00
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    Usually "double-dipping" refers to obtaining the second pension, not a second income from employment, – herb guy Mar 13 '18 at 6:31
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It will depend on the terms of the pension. There may be non-compete clauses or something similar for superintendents (or even teachers) that prevent them from drawing a pension while working for another school system. But other than that there's generally no restrictions on being able to work in other professions, or perhaps even other schools in a different state (so they're not "double-dipping" from the same budget).

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    Here in Fl when I retire from teh state system (I work at a college) I can't earn anything from the state for a calendar year after I retire. I can work private sector, etc. And after a full year, I can come back to the state system again. – ivanivan Mar 13 '18 at 14:12
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    In Oregon, it's a regular practice for public employees to double-dip after "retirement", and there are no rules to prevent it. The last numbers I saw (from 2012) were 1 in 10 public employees were rehired after retirement, and drew both a pension check and paycheck. – Nick2253 Mar 13 '18 at 15:22
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Yes. The rules will depend on the rules of the pension fund, though. In Illinois,

If you return to state employment on a contractual basis, […] or for the private sector, your SERS benefit will not be affected.

So to continue employment, the superintendent would need to go to a different state, or work in the private sector. In general, this is the same for most states and true of the private sector (there's nothing stopping you from taking out of a retirement fund given you meet all the requirements to draw from it).

In fact, the state of Alabama had a program specifically designed to prevent experienced employees from going to work for the benefit of other states in their early retirement years called DROP that basically mimicked the effect of pension+salary to keep them in Alabama.

Back to your example. In order to retire receiving 75% of one’s salary (based on the formula on the page I linked to), the employee would need to have worked a little over 34 years continuously. If retiring at age 59, there is a reduction of benefits by up to 6% as opposed to age 60 (0.5% per month before age 60), so the full benefits would not be realized.

Note, however, that educators do not pay into (and thus do not receive, barring other employment) Social Security in the state of Illinois. If teachers did (and I'm guessing there are some who did way back when and the law may have changed, else it wouldn't be in the calculation formula), they receive only 1.67% instead of 2.2% per year, which requires 45 years of employment for maximum benefits — impossible for a 59-year-old employee.

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    @jamesqf for this example, the employee would need to have begun working full-time with the state at age 14, and the would have needed to also go to college for at least 4 (but realistically 8-12 — every superintendent I know has a PhD or EdD) years. – guifa Mar 12 '18 at 18:01
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    @DonQuiKong because of work restrictions on under-16-year-old employees. I don't know what the restrictions were exactly 40 years ago, but today, for instance, that 14- or 15-year-old cannot legally work full time, as the maximum during school weeks would be 18 hours, thus they would not accumulate their 45 years until age 61. – guifa Mar 12 '18 at 19:30
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    @DonQuiKong they couldn’t - 10 is less than 14??? – Tim Mar 12 '18 at 23:20
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    @guifa I love you for actually answering them seriously. – Minix Mar 13 '18 at 8:20
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    If there was a change it would be toward SS not away. Originally SS did not cover state&local government employees because federalism; since 1951 such governments (or component agencies/systems/etc) can elect SS coverage by an agreement under section 218, and if they do so cannot go back. (And since 1991 employees are automatically covered if there is no state/local retirement plan.) irs.gov/government-entities/federal-state-local-governments/… has the best summary with links I can find. – dave_thompson_085 Mar 13 '18 at 8:41
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For State Service in California:

A State Retiree/Retired Annuitant is a person retired from California state civil service. The state may rehire this person as a retired annuitant to work up to 960 hours in a fiscal year (July 1 through June 30) without the loss of CalPERS retirement benefits.

PER: https://boomerang.ca.gov/sr_eligible.aspx

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tl;dr: It varies wildly depending on your state.


In the Texas teacher retirement system, you have to take a break in service after retirement, or you lose your pension payments for the months you're working.

  • One full calendar year before returning to full-time work*
  • One full calendar month before returning to part-time work*

*Note that these are required breaks for returning to work with any system in the state that uses TRS (not for some random private employment).

Source: https://www.trs.texas.gov/TRS%20Documents/employment_after_retirement.pdf

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