Those who retire before age 62 must execute a “bona fide” termination, as required by the Internal Revenue Service (IRS). If you are younger than age 62 at retirement, you must complete all the necessary paperwork to apply for and initiate your retirement, and you are not eligible to return to work unless meeting certain criteria.
The following factors are key in determining if a “bona fide” termination took place:
- The employee and the employer did not engage in discussions regarding reemployment before the employee’s separation from service. The IRS has singled out this factor as critical to support the occurrence of a true separation. Therefore, for employees who have not reached normal retirement age, discussions about reemployment are prohibited.
- The length of the break in service before reemployment is reasonable—at least 90 days.
- Upon separation from service, the employee surrendered something of value, such as seniority rights or access to benefits available only to active employees.
- The employer processed the employee as if he or she were separating from service. For example:
- A COBRA election or information on retiree health insurance coverage was provided to the employee upon separation, or
- A separation date was entered into the payroll/personnel system.
If you are under age 62 at the time of retirement:
- There can be no discussion of rehire before your retirement date has passed.
- You must have a break in service of at least 90 days before returning to work.
If these criteria are met, then at the department’s and university’s discretion, you may return to work, but only on a part-time basis. In other words, you may work at less than 75% full-time equivalency (FTE).
- The “less than 75% FTE” threshold is measured including all appointments you may hold at any given time.
- The decision of whether you will be offered employment is at the department’s and university’s discretion.
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