There are several ways in which an ERB retiree can work for an ERB employer after retirement. Of course, an ERB retiree can work for a non-ERB employer at any time without affecting his or her retirement benefits. You may also choose to suspend retirement and resume working as a regular ERB member, earning more service credit and possibly increasing the final average salary on which your benefits will be calculated when you re-retire.
Return To Work Program
The Return To Work Program (RTW) allows ERB retirees to go back to work for an ERB employer without having to suspend retirement benefits after they satisfy the requirements of the RTW Program. (The RTW Program is separate from the Greater of 0.25 FTE or $15,000 RTW Exception discussed later.) The retiree must complete a Return to Work Application and submit it to the ERB for approval before the retiree can begin working again. Retirees can choose to work full-time or part-time with no restrictions on the income they can earn.
Members who retired after January 1, 2001, must complete a 12 consecutive month break in service or layout. The 12 consecutive month period can occur any time after retirement, and it does not have to be immediately prior to applying for the RTW Program. During the break in service or layout, the member cannot work for or render any service to an ERB employer. "Rendering service" includes any work, whether full-time or part-time, substitute teaching, voluntarily performing duties that would otherwise be or have in the past been performed by a paid employee or independent contractor, or performing duties for an ERB employer as an independent contractor, or performing duties for an ERB employer as an independent contractor or an employee of an independent contractor. An ERB employer includes any entity incorporated, formed or otherwise organized by, or subject to the control of an ERB employer, whether or not the entity is created for profit or nonprofit purposes.
If you initially retired after January 1, 2001, and later suspended retirement and earned more service credit, you must complete a 12 consecutive month layout each time you re-retire to be eligible for the RTW Program.
The only exception to the break in service or layout requirement is for members who retired before January 1, 2001, and have not since suspended their benefits. If you are in that category, you do not need to fulfill the 12 consecutive month break in service or layout period. However, if you retired before January 1, 2001, then subsequently suspended your retirement to earn additional service credit, and then re-retired, you must complete a 90-day layout after re-retiring to qualify for the RTW Program.
During the 12 consecutive month layout period, you may work for non ERB covered employers, including employers covered by the Public Employees Retirement Association (PERA) unless you are a licensed educator working in a position that required such a license for a New Mexico agency that has an educational program (ie: Department of Corrections, Public Education Department, Department of Health, Division of Vocational Rehabilitation, and Educational Retirement Board.)
If you are working for an ERB employer as a contractor or under the Greater than 0.25 FTE or $15,000 RTW Exception, you must complete a 12 consecutive month break in service or layout before you may apply for the RTW Program.
The RTW retiree shall make non-refundable employee contributions to the NMERB Fund and will not earn additional service credit. The employer will continue to make employer contributions as specified by state statute. RTW retirees are reported on the employer's monthly report to the NMERB.
Please click here to see the ERB Director's Policy on the RTW non-refundable contributions.
Greater of 0.25 FTE or $15,000 RTW Exception
You may work for an ERB-covered employer after retirement without qualifying or applying for the RTW Program, but your earnings are limited. Under the Greater of 0.25 FTE or $15,000 RTW Exception, you may earn the greater of $15,000 annually or an amount equal to 25% of the salary for the full-time equivalency (FTE) of the job you are doing without affecting your retirement benefits. Full-time equivalent, or FTE, refers to the number of hours worked that add up to a full-time employee. The definition of FTE varies for each position. Your employer determines what the FTE is for a particular position and what 0.25 or 25% of FTE is for that position. The salary for the Greater of 0.25 FTE or $15,000 RTW Exception is calculated on a July 1 through June 30 fiscal year and based on the full-time compensation for the job you are doing, not on your salary before retirement.
If you are working for more than one ERB-covered employer, you are obligated to notify each of your employers about all of your ERB-covered jobs. The salaries of all jobs will be combined to determine whether you are in compliance with the Greater of 0.25 FTE or $15,000 RTW Exception.
If you earn more money than is allowed under the Greater of 0.25 FTE or $15,000 RTW Exception in a given fiscal year, you will lose your retirement status and forfeit retirement benefits effective on the first day of the month in which your cumulative earnings exceed the greater of $15,000 or the salary for 0.25 FTE. It is your responsibility to keep track of your earnings so you do not exceed the maximum allowed.
If you qualify, it is to your advantage to apply for the RTW Program even if you only intend to work under the Greater of 0.25 FTE or $15,000 RTW Exception. Once your application is approved, if your earnings exceed the allowable limit, you will not lose your retirement status or forfeit retirement benefits. If you have not applied and been approved for the RTW Program, you run the risk of losing retirement benefits if your earnings exceed the allowable limits under the Greater of 0.25 FTE or $15,000 RTW Exception.
Also, please remember that time worked under the Greater of 0.25 FTE or $15,000 RTW Exception does not qualify for the 12 consecutive month break in service or layout required for the RTW Program.
Independent Contractors
If you provide services to an ERB employer as an independent contractor, your earnings will have no impact on your pension. However, it is critical that both you and the employer follow IRS rules and regulations that distinguish between employees and independent contractors. Under IRS rules, a retiree cannot return to the same job with the same employer as a contractor until at least 90 days after the effective date of retirement. ERB retirees must complete the Employee vs. Independent Contractor Determination form, and submit it to ERB for review by the legal department. It also is important to remember that time working as an independent contractor for an ERB employer does not count toward the 12 consecutive month break in service or layout required for the RTW Program.
Non-ERA Employment
If you go to work for any employer that is not covered by the Educational Retirement act, your earnings will have no impact on your pension. This means you may work for any city, state, county or federal government, private school, Bureau of Indian Affairs school, public school outside of New Mexico, or private-sector employer, including a private school, without losing your benefit.
Suspending Retirement
If you have retired under the ERB Defined Benefit Plan, you may suspend your retirement and return to full-time employment with an ERB employer at any time. Suspending retirement is not the same as the Return To Work Program. You must notify the ERB of your change in status in writing. Upon your date of hire, the ERB will stop paying your retirement benefit and you will again become a contributing member of the ERB.
During re-employment after suspending retirement, you will earn more service credit and you might increase the final average salary on which your retirement benefit is calculated when you re-retire. When you decide to retire again, your benefit will be recalculated. In no case will your benefit be less than was when you retired the first time.
If you previously selected Option B "Joint 100% Survivor Benefit" or Option C "Joint 50% Survivor Benefit" to provide survivor benefits to your beneficiary, neither your option nor your beneficiary can be changed if you decide to suspend your benefits and return to work. For example, if you chose Option C with a 50% survivor benefit for your beneficiary when you retired the first time, your benefits will be recalculated at the Option C level when you re-retire. If you die after suspending your benefits and going back to work, your beneficiary will receive monthly benefits under Option C. If your beneficiary predeceases you, you cannot select another beneficiary and your retirement benefits will revert to the Option A "Straight Life" Benefit described on page 13 of the member handbook.
