For your retirement under LGERS or TSERS to be valid, one condition is that you must have no pre-arrangement to perform work after retirement for a system employer. (For limited exceptions, see “‘Performing Work’ Exceptions (TSERS ONLY)”.) You must comply with both of the following:

Under State law, retirement benefits can be paid only if you have no “intent or agreement, express or implied, to return to service” prior to retirement.

Under federal requirements, retirement benefits can be paid only if you have had a “bona fide separation from service,” which means that the employee/employer relationship has been severed.

Pre-arranged work that invalidates your retirement can include work as a temporary, part-time, or permanent employee, or as a contractor with a system employer, where you are paid directly or indirectly. See “Working for Private Entities” for applicability to contractor work.

Your retirement will be subject to cancellation – retroactively if necessary – if you pre-arrange to perform work after retirement for a system employer.

For your retirement under LGERS or TSERS to be valid, not only must you have no pre-arrangement to perform work, but you also must not perform any work for a system employer during the waiting period which begins on your effective retirement date. 

• For LGERS, the waiting period is one (1) month.
• For TSERS, the waiting period is six (6) months. For limited exceptions, see “TSERS ‘Performing Work’ Exceptions.”

Your waiting period begins on your effective retirement date (which is the first day of a month) regardless of when you terminated regular employment as a contributing member of the Retirement System.

Work that invalidates your retirement can include work as a temporary, part-time, or permanent employee, or as a contractor with a system employer, where you are paid directly or indirectly. See “Working for Private Entities” for applicability to contractor work.

If you perform work (which was not pre-arranged before retirement) for a system employer during the waiting period, the consequences depend on whether your new position requires membership in the Retirement System. See “Positions Requiring Membership in Retirement System.”

• If your work during the waiting period requires membership in the Retirement System, your monthly retirement benefit is cancelled retroactively to your retirement date. Your retiree group coverage under the State Health Plan (if any) is cancelled prospectively. You are required to repay the cost of State-provided State Health Plan premiums since your retirement date, if any.
• If your work during the waiting period does not require membership in the Retirement System – for example, if it is on a part-time, temporary, interim, or fee for service basis, whether as an employee or as a contractor – the consequence will be whichever of the following has a lesser impact on you:
  • You are deemed to have retired the month after the month you cease to perform services for the system employer, and you must repay all retirement benefits received, and the cost of any State-provided State Health Plan premiums until that date, if any; or
  • You are required to make a lump sum payment to the Retirement System equal to three times the compensation you earned during the waiting period. For TSERS, if you are unable to make the payment as a lump sum, your entire retirement benefit will be applied to the amount you are required to pay until the full amount is recovered. 

After you retire without a pre-arrangement to perform work, and you perform no work during the waiting period, your retirement is valid.

Once the waiting period has concluded, if you return to work in a position requiring membership, your retirement benefit is suspended. This occurs in the month following the month that you return to work, as you once again become a contributing member in the Retirement System. When you are no longer employed by a system employer, your retirement benefit can be reinstated.

All retirement benefits paid to you beginning with the month following the month you returned to employment must be repaid to the Retirement System.

After you retire without a pre-arrangement to perform work, and you perform no work during the waiting period, your retirement is valid.

Once the waiting period has concluded, if you perform work for a system employer and your work does not require membership in the Retirement System, you will not accrue any new service credit or contribute to the Retirement System.

In this situation, you continue to receive your monthly retirement benefit as well as earnings from your new position. However, your monthly retirement will be suspended (interrupted) if your annual earnings from the new position exceed the annual amount, sometimes referred to as the “earnable allowance.” You can earn whichever is greater without interruption to your monthly retirement benefit:

• 50% of your gross pre-retirement compensation (excluding terminal payments) or
• $40,980 (2024 amount)

The above amounts are adjusted annually on January 1 according to the Consumer Price Index, which is a national measure of increase in the cost of living from one year to the next. The limitation applies for the 12 months immediately following your effective retirement date and for each calendar year thereafter.

You can view your earnable allowance according to the Retirement System’s records by logging in to ORBIT and selecting the “View Earnable Allowance” menu option.

However, if you are concerned your reemployment earnings may exceed the limitation, it is important to be aware of what the limitation is likely to be based on your own records, rather than relying entirely on the Retirement System’s estimate. This is because the Retirement System’s estimate will be based on your pay history as reported by your employer, which may be subject to change.

If your employer amends your reported compensation, the Retirement Systems Division is required to correct the associated retirement payments issued to you, which may result in retroactive adjustments. 

If your monthly retirement is suspended because of exceeding the earnable allowance, the suspension is effective the first day of the month following the month in which your earnings exceed the limitation. Your monthly retirement benefit will remain suspended for the remainder of that calendar year and will be reinstated on January 1 of the following year.

If you have retiree group coverage under the State Health Plan, and your retirement benefit is suspended, your State Health Plan retiree group coverage is also suspended. Once your monthly retirement benefit is reinstated on January 1 of the following year, you will need to re-enroll in the State Health Plan as a retiree, and coverage will be reinstated as early as February 1. As a result, you may experience a lapse in your health coverage, meaning you may not have health coverage for a month or more.

If you do not inform the Retirement System at the time you exceed your earnable allowance, your monthly retirement benefit will be retroactively suspended for the associated month(s) once notice is received by the Retirement System. All retirement benefits and the cost of any state-provided State Health Plan premiums during this period must be repaid to the Retirement System. If the time period after your earnings exceed the limitation is extensive, the amount you must repay will likely be extensive as well.

As described in the section above, the consequences of reemployment depend in part on whether your new position requires membership in the Retirement System under which you retired.

• For LGERS, a “position requiring membership” means you are an officer or employee of a participating LGERS employer in a permanent position that requires at least 1,000 hours of work in a calendar year. You are not a contributing member of LGERS if your employment is considered “temporary employment”, meaning employment for a limited term which does not exceed 12 consecutive months on a non-recurring basis for an LGERS employer, or “statutorily required interim employment,” meaning employment as an interim city or county manager for a period that does not exceed 12 months on a non-recurring basis.
• For TSERS, a “position requiring membership” means you are a teacher or employee of a participating TSERS employer in a permanent position working at least 30 hours per week on a recurring basis for at least nine (9) months per year. A position with a UNC system institution where you are eligible to enroll in the UNC Optional Retirement Program is also a “position requiring membership” in TSERS under these rules.

Please note that the employer’s label for a position (permanent vs. temporary, or part-time vs. full-time) may not indicate whether the position requires membership in the Retirement System. 

“Return-to-work” laws do not apply if you are employed with a private-sector employer and you perform no work for a system employer. Your benefit will continue.

However, work performed for a system employer can include contractor work on the system employer’s behalf.

If you are working for a private entity, the “return-to-work” laws will apply to contractual work you perform for a system employer if you receive payments from the system employer, personally or through a business you own. They will also apply if you are assigned to perform work for the system employer to the degree that you become a common-law employee of the system employer. Beyond these situations, it is possible they could apply, but only if you are clearly “engaged to perform services” for the system employer (which is the phrase used in the North Carolina General Statutes).

The above would also apply if you are employed with a governmental employer (for example, the federal government, or a state, county, or municipality) that does not participate in the Retirement System under which you retired.

You are not considered to be “performing work” if you are doing any of the following:

• Serving on an authority, board, commission, committee, council, or other body of the State or of one or more counties, cities, local school administrative units, community colleges, constituent institutions of The University of North Carolina, or other political subdivisions or public corporations in the State, that is authorized to function as legislative, policymaking, quasi-judicial, administrative, or advisory body in a position that does not require membership in TSERS.
• Serving as a volunteer guardian ad litem.
• Serving as a volunteer in a position normally designated as an “unpaid bona fide volunteer” position. This means that you may serve, without affecting your TSERS retirement benefits, in a position in which any individual performing that type of service would not be paid. You will be “performing work” (and subject to the return-to-work laws) if other individuals performing that type of service are typically paid.

For example, if you are a TSERS retiree and wish to spend a few hours a week selling concessions at an athletic game or assisting with fundraisers, among other activities, that would not count as “performing work” during the six-month period  provided people who typically do that work are not paid. However, serving as a classroom teacher (including as a substitute teacher) would count as “performing work,” because people who perform that service are generally paid.

Volunteering to fill a vacancy that is normally a paid position with a TSERS employer would make you subject to return-to-work laws. To meet the “unpaid bona fide volunteer” exception, your work must be performed without promise or expectation of compensation. If volunteering today helps you secure a paid position in the future, that is a form of compensation, and such an arrangement would be subject to the return-to-work laws.

There are some “volunteer” situations that are unclear, for example duties sometimes performed by paid employees and sometimes performed by parent or community volunteers. If you are considering volunteering in one of those roles, we strongly suggest that you provide the Retirement System with a full written description of the role you are considering so you can be given further guidance.

Enrollment in the Contributory Death Benefit is available the first time you retire. If your retirement benefit is stopped or interrupted due to a return to work, the automatic deduction for your premium will stop. To remain enrolled, you must continue paying the monthly premium. The Retirement System will send a bill to your home address on record with the Retirement System every month. Re-enrollment is not offered upon subsequent retirements.

If your monthly retirement includes other deductions, such as for taxes, association dues, or other types of benefits, those deductions will stop when your retirement benefit is stopped or suspended. It is your responsibility to make arrangements for any transactions or payments you wish to continue.