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If I’m 62 or older, can I continue to work in the UM System (UM) after retirement?

If you are at least age 62 at retirement:

  • You must complete all the necessary paperwork to apply for and initiate your retirement.
  • 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) at the department’s and university’s discretion.
  • The “less than 75% FTE” threshold is measured by including all appointments you may hold at any given time.
  • The decision of whether you will be offered continued employment is at the department’s and the university’s discretion.

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I won’t be 62 when I retire; can I continue to work for the university after retirement?

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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Does the “90-day break” apply to retirees moving from one appointment to another?

If you are under age 62 at the time of retirement, no, the requirement that you must have a 90-day break in service does not apply.  The requirement that you must have a 90-day break in service only applies when the employee separates from service from the university and elects to take their retirement benefit.

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Can retirees be rehired as independent contractors/consultants since they’re not UM employees?

If the retiree meets all of the IRS and UM criteria required to be an independent contractor or consultant, the retiree may be hired as such since contractors are not considered UM employees. However, this mechanism must not be utilized in order to circumvent the policy of reemploying retirees. Contractor and consultant appointments must be approved in advance by campus business services.

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How will laid-off employees who retire within/at the end of layoff leave of absence be treated?

If retirement eligible, these employees may choose to retire in order receive any retiree pension benefits and health and welfare benefits for which they may be eligible, even though they in fact wished to continue working. Pursuant to UM layoff policy, applicable individuals are entitled to the right to recall and preference for reemployment, and may return to work in a career position if a recall or reemployment opportunity arises. But these individuals must agree to suspend their monthly retirement payments at the time of rehire. If the retiree is under age 62, then they must meet the guidelines to be eligible for rehire.

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