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Working after retirement

Determine whether an earnings limitation could affect your TRA pension.

Retirees

Reemployment after TRA benefits begin

You may return to work after retirement in a position that is not covered by TRA at any time with no earnings limitation or impact on retirement benefits.

If you retire and return to work in a TRA-covered position, standard TRA employee contributions will no longer be withheld from your postretirement earnings and you will not earn any additional service credit. If you are immediately returning to work for your preretirement employer, you will need a return-to-work agreement. Otherwise, you will need a break in service between retiring and returning to work.

Postretirement earnings limitation suspension

Normally, if you retire and then return to work in a TRA-covered position before reaching your Social Security full retirement age, you must earn less than $46,000 annually to receive your full monthly pension payments. 

However, the $46,000 earnings limit is currently suspended for retirees returning to work in PreK–12 positions through June 30, 2030.

Minnesota State exception: This suspension does not apply to retirees returning to work in Minnesota State positions. For those participating in the Annuitant Employment Program, the $62,000 limit is still in effect. If you return to work in a Minnesota State position and exceed the limit, a portion of your pension payments will be withheld the following year and directed to an Earnings Limitation Savings Account.   

FAQs – Postretirement work

  • The earnings limitation is applied to salary earned on a fiscal year basis (July 1 to June 30).
  • If you are under normal retirement age for the entire fiscal year, as defined by the Social Security Administration, the earnings limitation is $46,000.
  • If you are under normal retirement age and are retired for only a portion of the year, the earnings limitation amount will be prorated ($46,000 x number of months retired during the fiscal year ÷ 12). The year you turn your Social Security normal retirement age, the limit is $46,000 for the portion of the year you are under normal retirement age.
  • If you are a Minnesota State retiree on the Annuitant Employment Program, the earnings limitation is $62,000 for the fiscal year. It is not prorated for the first year of retirement or for the year you reach your normal retirement age.

If you earn salary over the limit, your annuity payment is reduced the following year by $1 for each $2 above the limit. Your benefit will be reduced or stopped beginning in January of the following year until the entire amount has been withheld. It is put into an Earnings Limitation Savings Account (ELSA). The process repeats every fiscal year you work and earn more than $46,000.

Each year, you will receive an ELSA annual statement, which is a comprehensive report of your savings plan for each calendar year. At any time, you can sign in to your myTRA online account and view your ELSA account.

  • You may apply for a refund of your ELSA account beginning one year after the last deferred amount was redirected to your ELSA account.
  • If you have chosen an accelerated annuity, the accelerated portion is not withheld.
  • No interest is earned on ELSA account balances.
  • You must submit an ELSA refund application to TRA to receive your account balance.
  • When you request a refund, you will receive the full, eligible amount; partial refunds are not available.
  • You may elect to have all or any portion of your ELSA refund payment rolled over to a traditional IRA or an eligible employer plan. You can also convert your refund to a Roth IRA; some tax implications will apply.
  • You may also elect to receive a lump sum refund, minus applicable taxes.
  • We suggest you consult your tax adviser regarding any tax implications. If you choose to receive a lump sum, the distribution will be reported on IRS Form 1099-R as a normal annuity payment.
  • If you apply for a refund and then return to work, the earnings limit will apply to that reemployment salary as well. You will need to apply for another refund one year after the second period of deduction ends.

Your ELSA account is separate from your TRA pension benefit.

The beneficiary designation you make for your ELSA account is a separate designation from the beneficiary designation you have made for your retirement account.

In the event of your death prior to receiving a distribution from your ELSA account, and upon application by your beneficiary(ies), a lump sum payment of your ELSA balance will be distributed.

As outlined in Minnesota Statutes 356.47, payment will be made to:

  1. a surviving spouse, or if none,
  2. designated beneficiary(ies), or if none,
  3. your estate.

If you are not married and wish to designate a beneficiary, or if you wish to designate a beneficiary in the event of your spouse’s death, you may designate any person(s), trust(s) or organization(s) as your beneficiary(ies).

It is important to keep your beneficiary designation up to date. Contact TRA to request an Earnings Limitation Savings Account Beneficiary Designation form.