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Rehired Annuitants Q&A

Questions and Answers for Employees
Who Want to Return to Work after Retirement

After you retire from the University, you are permitted to return to work with the University, any other Wisconsin Retirement System (WRS) covered employer or any other employer. If you return to a WRS covered employer, including the University of Wisconsin, after retirement, you are considered a "rehired annuitant." This page provides basic information about your benefits should you become a "rehired annuitant." Consult your staff benefits office if you have questions or are considering this option.

1. Who is a rehired annuitant?

Per §ETF 20.02, Wis. Adm Code, a rehired annuitant is defined as:

At least minimum retirement age of 55 (age 50 for protectives);
Retired from the UW or another State of Wisconsin agency or local unit of government in Wisconsin that is covered by the WRS;
Receiving an annuity from the WRS;
Had at least a 30-day break in service after retiring; and
Now works for the UW or another WRS-covered employer.

An employee who previously received a lump sum separation or retirement benefit from the WRS is not considered a rehired annuitant.

2. How soon after retirement can an annuitant be rehired by a WRS-covered employer?

An annuitant can return to work with a WRS-covered employer after a minimum 30-day break in employment. The minimum break in employment begins on the employee’s termination date and ends on the latest of the following:

The day after the annuity effective date; or
The 31^st day after the termination date; or
The 31^st day after ETF receives the benefit application.

Before an employee retires, the employee and employer may discuss the possibility of returning to work after retirement, but there CANNOT be an enforceable contract in place to return to work before the employee's termination date. The employee and employer are allowed to discuss and sign a contract during the employee's 30-day break in employment but the employee can NOT return to employment until the required 30-day break in employment is completed.

Contracts or agreements entered into during the minimum break in service period bring into question whether the termination was done in "good-faith." To ensure compliance with federal IRC s.401(a), ETF may investigate situations where a contract or agreement was entered into during the minimum break in service period. See ETF's educational bulletin about rehired annuitants for more information about a valid, "good faith" termination.

For detailed information about what constitutes a valid termination, go to: http://www.uwsa.edu/hr/return.htm

3. Can an annuitant be hired for any position?

Yes, an annuitant is eligible to compete for any position, subject to the applicable hiring criteria. The employer is not obligated to hire or rehire an annuitant. The annuitant must still go through any required testing for a position and the interview process.

Rehired annuitants often accept LTE, project, or short-term academic staff appointments as a way to transition to retirement but they are not limited to those positions.

4. Is there a limit on the amount of earnings a rehired annuitant may receive?

For WRS purposes, there is no limit on the amount of earnings a rehired annuitant may receive. For those who are receiving Social Security benefits, there may be an earnings limit. Earnings in excess of this limit may create a substantial reduction to Social Security benefits. Rehired annuitants should contact their local Social Security Administration office for additional information and earnings reporting requirements. Please also see the Social Security Administration Leaflet, How Work Affects Your Benefits, for more information.

5. Is the employer required to offer a rehired annuitant the option of WRS participation?

Yes, the employer must offer the rehired annuitant the option of stopping annuity payments and restarting WRS participation if the position qualifies for WRS participation. For the position to qualify for WRS participation:

The employee is expected to work one-third of full-time. One-third of full time is defined in §ETF 20.015 Wis. Admin Code as 600 hours for non-teaching employees and 440 hours for teachers, including faculty and academic staff; AND
The employee is expected to be employed for at least one year (365 consecutive days, 366 in a leap year) from the hire date. Employees hired on an academic year basis but are expected to return the following year are considered to have met the one year requirement.

If an employee does not meet WRS eligibility criteria upon hire, the employee may subsequently become eligible:

When expectations change - the employee is now expected to work at least one year and the required hours for the position type; or
On the employee's one year anniversary date - the employee is eligible for WRS coverage after working one year and the required number of hours for the position type; or
During a 12 month rolling look-back period - if the employee does not meet the hours worked requirement on the one year anniversary date, the employer will continue to review the hours worked on a monthly basis. The employee becomes eligible for WRS coverage the day after the employee works over 440 hours (teacher) or 600 hours (non-teacher) in any immediately preceding 12 month period.

The employer cannot choose whether or not to enroll someone in the WRS if the employee is eligible but a rehired annuitant may decline WRS participation. A rehired annuitant who elects not to resume WRS participation will not earn WRS service credits or accumulate retirement contributions during the return to work and is not eligible for other benefits that depend on active WRS coverage.

6. If a rehired annuitant is eligible for WRS coverage, what options does the rehired annuitant have relative to the annuity and benefits?

Once a rehired annuitant is eligible for WRS participation, the employer must submit a Rehired Annuitant Election (ET-2319) directly to the Department of Employee Trust Funds (ETF) within seven calendar days of the rehired annuitant's hire date or eligibility for WRS coverage, whichever is earlier.

A rehired annuitant who is eligible for WRS coverage has the following two options:

1. Cancel the monthly annuity and elect coverage under the WRS

WRS coverage will be effective on the 1st of month following ETF's receipt of a Rehired Annuitant Election (ET-2319).

From the date the employee goes back under the WRS, the employee's service and earnings will be credited to the employee's WRS account.

The employee will be immediately eligible to enroll in all benefit plans (health, life, dental, vision...) just as any other active employee in that same position. The employee must submit completed benefit applications to the employer within 30 days of the WRS participation begin date. If the rehired annuitant continued or converted coverage under any insurance plans at the time of the first retirement, that coverage must be terminated before enrolling in the plan as an employee.

If the rehired annuitant is age 65 or over, this may impact Medicare Part B coverage because the employer plan will be the primary payer for health coverage. The rehired annuitant should contact the local Social Security administration office for more information about how employment impacts the Medicare Part B coverage.

The balance of the employee's sick leave credit account used to pay for retiree health insurance will be frozen and saved for future use. When the employee retires again, any sick leave earned while a rehired annuitant will be converted to sick leave credits and added to the employee's previous sick leave credit account balance.

Upon re-retirement, the annuity will be recalculated to include the additional service and earnings earned while a rehired annuitant and the annuity will also be adjusted to account for any annuity payments previously received.

OR

2. Choose to continue to receive annuity payments by declining WRS participation

The rehired annuitant will not be eligible for active health or life insurance or other insurance benefits for which WRS coverage is a prerequisite.

No WRS credit is granted for the time worked but the employee will continue to be eligible for annuitant health and life insurance coverage.

Eligible to participate in salary reduction plans, such as the Tax-Sheltered Annuity and Deferred Compensation programs, Long-Term Care Insurance, the Employee Reimbursement Account (ERA), and qualified transportation/commuter benefits.

Eligible to earn paid leave benefits if the rehired annuitant works in a leave eligible position; however, sick leave earned during the return to work cannot be converted to pay health insurance premiums in retirement.

A rehired annuitant is not required to elect WRS participation when first eligible. As long as a rehired annuitant is working in a WRS eligible position, the rehired annuitant can elect to participate in the WRS at any time. WRS coverage will begin the 1st of the month following ETF's receipt of the Rehired Annuitant Election. Once a rehired annuitant is covered by the WRS, the rehired annuitant must terminate employment to stop WRS participation.

7. Are rehired annuitants eligible for paid leave benefits?

If a rehired annuitant works in a position eligible for paid leave benefits, the employee will receive those benefits. Different employment categories provide different paid leave benefits. See below for detailed information about rehired annuitants and paid leave benefits.

Classified Permanent Positions

Note: Leave benefits for classified represented positions may be affected by the applicable collective bargaining agreement.

Vacation: A WRS annuitant who is hired into a classified permanent position is entitled to earn vacation whether or not the annuitant opts for active WRS participation. The amount of vacation will depend on whether the individual has reinstatement eligibility under §230.31, Wis. Stats., ER 29.03 (6), or ER-MRS 16.035, Wis. Adm. Code. If the rehired annuitant does not have reinstatement eligibility, vacation will be earned as a new State/University employee (except for employees in classified non-represented FLSA exempt positions per ER 18.02(2)(b)(6), Wis. Admin. Code).

At the time of retirement, any unused vacation will be paid as a lump sum or may be used to extend the termination date. Vacation carry-over is subject to same rules and regulations for rehired annuitants as for non-annuitants.

Sick Leave: The rehired annuitant is entitled to the same sick leave as any other employee in that position.

If the rehired annuitant elects not to participate in the WRS and continues to receive annuity payments, sick leave accumulated as a rehired annuitant CANNOT be converted to credits to pay retiree health insurance premiums.

If the rehired annuitant cancels the retirement annuity and again becomes a WRS participant, sick leave credits granted at the time of the first retirement are saved until the employee again retires. Sick leave accrued as a rehired annuitant will be converted to sick leave credits when the employee retires again. When the employee re-retires, the sick leave credits earned as a rehired annuitant will be added to the remaining sick leave credits from the prior retirement.

Sick leave hours already converted to pay for retiree health insurance premiums are not reinstated or restored to the employee upon return to work. The rehired annuitant will begin with a zero sick leave balance.

Personal Holiday: A rehired annuitant (except those covered by the Trades bargaining unit) receives 36 hours (4.5 days) of paid personal holiday each calendar year (prorated if less than full-time). No one can receive more than 4.5 days of paid personal holiday hours per calendar year.

Unclassified Permanent Positions

Vacation: If the appointment is an annual appointment and WRS eligible, regardless of whether or not the employee opts for WRS coverage, the rehired annuitant will earn 22 days (176 hours) of vacation per year, prorated for part-time employment.

Annual Leave Reserve Account (ALRA): If the rehired annuitant in an unclassified position returns to UWS employment within the three-year reinstatement period and previously met the criteria for the Annual Leave Reserve Account (ALRA), the rehired annuitant is eligible to utilize ALRA as a rehired annuitant. This does not apply if the employment contract mandates use of earned leave during the term of the contract.

Sick Leave: If the position qualifies for sick leave under § UWS 19.02, Wis. Admin. Code (basically the same eligibility criteria as for the WRS), sick leave will be granted. Per UPG 10.03, if the rehired annuitant returns to UWS employment within three years of termination, the rehired annuitant will accrue sick leave at the rate of one day per month (annual appointments) or six days per semester (nine-month staff), prorated for part-time employment. If the rehired annuitant has no prior WRS unclassified appointments or returns after the three-year reinstatement period, the rehired annuitant is entitled to an initial entitlement of 22 days of sick leave, prorated for part-time employees. Additional leave will be granted after 18 months as for all other unclassified permanent employees.

Personal Holiday: A rehired annuitant receives 36 hours (4.5 days) of paid personal holiday each fiscal year. Employees may not accrue more than 4.5 days during one fiscal year.

LTE/Project Positions

An annuitant hired to a project position is eligible for the same leave benefits as other project employees in the same or like position. LTEs are paid for hours worked and do not earn paid leave.

8. What if the annuitant goes to work for a non-WRS employer?

None of the annuitant’s benefits as a State of Wisconsin retiree will be affected.

9. Where can I find more information about rehired annuitants and requirements of a valid termination?

For a summary of the rehired annuitant program, go to UW System's Quick Guide to the Rehired Annuitant Program for UW System Employees. Additional information about the requirements of a valid termination is located at: http://www.uwsa.edu/hr/return.htm. You can also contact your institution's employee benefits office with any questions.

UWS 70 (Rev 1/09)

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