Countdown to new re-employment rules

March 15, 2012

Heading back to the classroom this fall? If so, don't forget about the new re-employment rules that begin Sept. 1, 2012.

Important

  • You will still be required to track your days and contact Teachers' if you exceed the new re-employment limit of 50 days.
  • If you continue to work the month after you exceed the limit, your pension will be suspended for as long as you work, even if it's for only part of a day.

What's changing?

You will be able to work in education without affecting your Teachers' pension for up to 50 days in each school year following your retirement. Also, your employer will be required to report re-employment service beginning in the 2012-13 school year.

As you start planning for the fall, we answer some of the most common re-employment questions.

Q. How do I know if I'm a "re-employed pensioner"?

Under current plan provisions, you are considered a re-employed pensioner and subject to re-employment rules if you meet the following conditions:

  • you have ceased employment in education;
  • you have applied for a retirement pension under the plan; and
  • you are then employed by or otherwise engaged, directly or indirectly, to provide services for compensation for an employer who participates in the pension plan.

Q. What does "indirect employment" mean?

You are indirectly employed if you are self employed or work for a third party and you provide services to a participating employer.

Re-employment rules have always applied to these types of arrangements that involved teaching. The definition of "re-employed pensioner" was expanded in 2010 to include all re-employment, teaching or non-teaching, whether done on an employment, self-employment or third-party basis.

If you are unsure whether your self-employment or work for a third party is subject to re-employment rules, ask yourself the following questions:

  1. Are the services you provide normally performed by an employee at the participating employer?
  2. Does a participating employer assign and control your duties?

If you answer "yes" to either of the above, it is likely re-employment.

Q. Do the re-employment rules apply if I don't get paid for my work?

You can't forgo compensation to circumvent the rules. Keep in mind that payments for services rendered may include gifts and gift certificates.

To determine if volunteer work for a participating employer counts towards the re-employment limits, ask yourself the following questions:

  1. Are you paid for this activity or entitled to payment and chose to forfeit it?
  2. Have you been paid for performing this activity in the past, in and of itself?

If you answer "yes" to either of the above, it is likely re-employment.

Q. I retired in June 2011. I am re-employed this year and plan to continue working in the subsequent school years. Does that mean that I lose two years to work up to 95 days?

Yes. With the new rules becoming effective Sept. 1, 2012, you will only be able to return to work for 50 days in your second and third years of re-employment.

Have other questions?

Do not hesitate to contact us if you are unsure whether the re-employment rules apply to your situation.