POST-RETIREMENT WORK

Back to class Q&A

Retirees may return to work in a TRA-covered position and earn up to the earnings limitation without reducing their TRA pension benefit.

Q. who can return to work?

Anyone can return to work; however, to enter into a return-to-work agreement, you must meet the following eligibility requirements:

  • You are at least age 62.
  • You must enter into a written agreement with an employing unit to return to work.
  • You must submit a TRA retirement application and begin to receive a TRA annuity.

Download a Return-to-Work Agreement from your MyTRA account or call to have one mailed to you. It must be signed by your employer and returned to TRA.

You will neither earn additional service credit nor be required to contribute to TRA.

Q. What is the limit i may earn IN ONE YEAR?

The earnings limitation is applied to salary earned on a fiscal year basis (July 1 to June 30).

  • If you are under your Social Security normal retirement age (the age at which you can receive unreduced benefits) for the entire fiscal year, the earnings limitation is $46,000.
  • If you are under your 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).

Note: If you are a Minnesota State Colleges and Universities retiree on the Annuitant Employment Program (AEP), 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.

Q. What salary is included?

Any salary you earn from a TRA-covered position is considered earnings after retirement. That means that any earnings from any position that is normally covered by TRA are reported as annuitant earnings after retirement.

Income from teaching service includes, but is not limited to, all income for services performed as a teacher, administrator, employee of a third-party supplier, consultant or an independent contractor for a TRA-covered employer. Income earned while employed in a position not covered by TRA (e.g., discount store employment, etc.) is not subject to the earnings limitation.

Q. What happens TO MY BENEFIT if I exceed the EARNINGS limitATION?

Your annuity payment is reduced by $1 for each $2 above the limit. This is the “offset amount.”

Beginning in January of the next year, your benefit payments stop or are reduced until the entire offset amount is put into your Earnings Limitations Savings Account (ELSA).

If you have chosen an accelerated annuity, the pension offset amount is only applied toward the “life” portion of your monthly annuity payment. The accelerated portion of your monthly benefit is considered a term annuity and is unaffected by the ELSA offset process.

Q. What happens when I reach normal retirement age?

Members who have reached Social Security normal retirement age are not subject to the earnings limitation. In the fiscal year that you reach normal retirement age, you can earn $46,000 between July 1 through the month prior to reaching full retirement age. Once you reach the month of your normal retirement age, you are no longer subject to any limitation.

Q. Can I view my ELSA ACCOUNT?

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 log into your MyTRA online account and view your ELSA account.

Q. Does my ELSA account accrue interest?

Money redirected to your ELSA account accrues no interest.

Q. How do I get a refund of my 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. No interest is earned on account balances.

An ELSA refund application must be submitted to TRA. 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 personal tax adviser if you have questions about the 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.

Social Security deductions are required from salaries of all TRA retirees (regardless of age) who resume teaching service. TRA deductions are no longer withheld.

Q. What happens if I die before receiving my ELSA refund?

By law, pension benefits are paid in the following order:

  • Surviving spouse
  • Designated beneficiary(ies), if any
  • To your estate.

It is very important to keep your beneficiary designation up to date. The beneficiary designation you make for your ELSA account is a separate designation from the beneficiary designation you have made for your retirement account and does not need to be the same. Contact TRA to request an Earnings Limitation Savings Account Beneficiary Designation form.

 

Social Security Normal Retirement Age

(by year of birth)

1943-1954: 66

1955: 66 and 2 months

1956: 66 and 4 months

1957: 66 and 6 months

1958: 66 and 8 months

1959: 66 and 10 months

1960 and later: 67 years

How to designate a beneficiary

Call us at 800-657-3669 or 651-296-2409 to request assistance with your beneficiary designation
or to request a beneficiary form.

  • If you are married, request and complete a Pre-Retirement Death Benefits for Married Members form. You and your spouse may jointly waive your spouse’s benefits so that any person, trust or organization will receive a lump-sum death benefit equal to your accumulated deductions plus interest to the date of death.
  • If you are single, request and complete a Pre-Retirement Death Benefits for Single Members form.