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Return-to-Work Guidelines
- Federal Government Requirements
- Full-time and Part-time Employment
- Non-Covered Employment with the Same Employer
- Teaching After Retirement
- Teachers Taking ERIPs
- K-12 Critical Shortage Positions
- Returning to Covered Employment
- Life Insurance
- Disability Coverage
Federal Government Requirements
Under the Internal Revenue Service (IRS) guidelines, VRS is a qualified pension plan. The IRS prohibits distributions from a qualified pension plan to members who are actively employed in either a full-time or part-time hourly position with an employer participating in that plan. This includes:
- Retirees who return to covered employment.
- Retirees who return to non-covered employment with the same employer without a bona fide break in service. Non-covered employment includes temporary, part-time hourly and adjunct faculty positions that do not provide VRS benefits.
- Members who have taken a refund of their contributions.
Federal requirements govern all VRS plans:
- Virginia Retirement System (VRS) (teachers, state employees, local government employees, political subdivision employees in hazardous duty positions)
- State Police Officers’ Retirement System (SPORS)
- Virginia Law Officers’ Retirement System (VaLORS)
- Judicial Retirement System (JRS)
- VRS Optional Retirement Plans (ORP)
Non-compliance will affect employers, members, retirees and VRS. It may result in penalties for employers and VRS, and members and retirees may face tax consequences and penalties.
Full-Time and Part-Time Employment
VRS leaves the definition of full-time and part-time to employers according to the following general guidelines:
- The normal workweek for full-time employment is typically 40 hours a week. Thirty-two hours is considered the minimum number of hours for full-time employment.
- Part-time employment is considered to be less than 80 percent of full-time employment.
Non-Covered Employment with Same Employer
VRS retirees who accept non-covered employment with the same employer must have a bona fide break in service of at least one full calendar month after they retire to continue receiving their benefits. Non-covered employment includes temporary, part-time hourly and adjunct faculty positions that do not provide VRS benefits.
Public school divisions and political subdivisions are considered separate employers. However, the Commonwealth of Virginia, including all state agencies and public colleges and universities, is considered the same employer.
Before hiring a VRS retiree in a non-covered position, you should:
- Check that the retiree has been terminated from the VRS-covered payroll for at least one full calendar month after his or her retirement date.
- Have no pre-arranged employment commitment with the retiree.
- Ensure that the retiree is not expected to perform all of the duties required of his or her pre-retirement, full-time position.
- Evaluate the need for the position periodically if it does not have an end date.
- Structure the position so that the hours worked are at less than 80 percent of full-time employment. Position descriptions should clearly define the difference between part-time and full-time positions requiring the same skills, experience and knowledge.
Teaching After Retirement
VRS requires a break in service of at least one full calendar month after the member’s retirement date over a period the member normally would work before he or she can return to non-covered employment with the former employer. Summer breaks do not count toward satisfying the one-calendar month break in service.
Teachers Taking ERIPs
Teachers considering taking an early retirement incentive program (ERIP) should be aware that:
- VRS retirement benefits will continue if the member has a bona fide break of at least one full calendar month following his or her retirement date over a period he or she would normally work and returns to the classroom on a part-time basis.
- Retirement benefits will cease if the member returns to a position that qualifies as a covered position under VRS.
K-12 Critical Shortage Positions
VRS retirees who are licensed by the Virginia Board of Education may continue to receive retirement benefits if they teach full time in a critical shortage area. They do not have to be retired from a teaching position.
To be considered for a critical shortage position, they must:
- Be licensed by the Virginia Board of Education for the position they will hold.
- Teach in an area designated as critical shortage by the Department of Education.
- Have a bona fide break in service of at least 12 consecutive months between their retirement date and the date they wish to work in a critical shortage position. This break in service includes not working in any full-time, part-time or temporary position, including a summer school or substitute teaching position, with any VRS-participating employer.
- Not have retired under a local school system’s early retirement incentive program (ERIP), unless the member is receiving an unreduced VRS retirement benefit. Any period of work performed by the retiree to satisfy the requirements of an ERIP will extend the number of months required to satisfy the bona fide break in service to comply with this program.
- Not have taken a refund of their retirement contributions and interest in their member contribution accounts or deferred their retirement.
Returning to Covered Employment
If a retiree returns to VRS-covered employment, benefits cease and the retiree again becomes an active member. To avoid overpayment of retirement benefits, you and the member must submit a Request for Termination of Monthly Benefit (VRS-7) to VRS immediately upon the member’s re-employment.
Life Insurance
Retirees who return to covered employment with employers that offer the Basic Group Life Insurance program resume their active-member coverage based on their compensation when they retired. If the retiree has 20 or more years of service, coverage is based on the highest compensation in his or her history of VRS-covered employment.
Retirees returning to employers that do not participate in the Basic Group Life Insurance program continue their retiree coverage at the level to which it had reduced before re-employment.
Disability Coverage
Retirees who return to covered employment with the Commonwealth of Virginia are automatically enrolled in the Virginia Sickness and Disability Program (VSDP). Faculty members who elect to participate in the VRS defined benefit plan have the option to enroll in VSDP or the institution’s disability program.
Retirees who return to covered employment with any other participating employer are eligible to be considered for VRS disability retirement.
