NOTE: The 2019 Regular Session of the Kentucky General Assembly made some changes to the reemployment after retirement laws. A brief summary of the changes, and a link to the legislation, can be found in the 2019 Legislative Update News Article from the Spring 2019 Member Newsletter, Pension Insights.
We are currently reviewing the changes and will be updating this page as soon as possible.
Most members pursue personal interests after
retirement — the reward for their service to the public. Some members use
retirement to begin a second career, and others return to work for financial
reasons. Whatever the reason, there are several things for KRS retirees to consider before accepting
other employment.
The following is an overview of the requirements of KRS 61.637, the
employment after retirement statute. If you plan to be employed in any capacity,
you must obtain a written opinion from KRS before starting work in order to
avoid any negative consequences to your monthly retirement benefit.
Bona Fide Separation from Service:
When you retire, you must
cease all employment with all CERS, KERS, and SPRS participating agencies. Retirees may not enter into a prearranged agreement to return to employment
in any position with any agency
participating in CERS, KERS, and SPRS. Prior to reemployment, the
participating agency and retiree must certify on the Form 6751, Member and Employer Certification Regarding Reemployment, under penalty of perjury, that no
prearranged agreement exists. A prearranged agreement does not have to be in
writing. An oral agreement or a mutual understanding is a prearranged
agreement.
In order to avoid having a prearranged agreement, the wisest course of action
is to wait until after your effective retirement date to seek employment with
any agency that participates in CERS, KERS, or SPRS. You do not have to submit
a Form 6751 if you do not intend to return
to work. A Form 6751 completed prior to your
effective retirement date by you and an agency participating in CERS, KERS, and
SPRS tends to suggest a prearranged agreement if you do return to work for
that agency, even if the Form 6751 was not
submitted until after your effective retirement date. If you return to work and
are found to have a prearranged agreement to return to work, your retirement
will be voided and you will have to repay all retirement benefits you received,
the health insurance premiums paid on your behalf, and any dependent child
payments.
Duration of Separation from Service:
An employee who is retiring and returning to work will be required to observe
a break in service of either one (1) or three (3) months before returning to work
with a participating agency. Most employees will be required to observe a three
(3) month break in service before returning to work. If you do not observe your
break in service, your retirement will be voided and you will have to repay all
retirement benefits you received, the health insurance premiums paid on your
behalf, and any dependent child payments. There are many factors that may impact
your eligibility to pursue employment after retirement. You must contact KRS regarding your
specific circumstances and obtain a
written opinion from KRS before you accept employment after
retirement.
Participation in KRS:
If the retiree is returning to a regular full-time position on September 1,
2008 or later, the retiree will not make contributions to KRS. The re-employed
retiree will earn no service credit during the period of re-employment and will
not be eligible for any additional retirement benefits based upon the
reemployment.
Health Insurance:
If the retiree has an initial participation date with KRS prior to
September 1, 2008, but is re-employed on or after that date in a participating
position and has elected health insurance coverage through KRS, the agency will
be required to reimburse KRS for the contribution made for single coverage
health insurance for the retiree.
If the retiree has an initial participation date with KRS on or after
September 1, 2008 and is re-employed after retirement in a regular full-time
position, the employee will not be eligible for health insurance coverage
through KRS and will be required to take health insurance coverage through his
employer during the period of reemployment.
Medicare Secondary Payer
Please be advised that under the Medicare Secondary Payer (MSP) Act, in certain circumstances, a Medicare eligible retiree's re-employment with a participating agency of Kentucky Retirement Systems will PROHIBIT Kentucky Retirement Systems from offering or continuing to offer retiree coverage under the Humana Medicare Advantage Plan. Please call KRS if you have questions. You should also contact Medicare if you have questions. Need more details click here.
Other Resources:
There is existing legislation that gives guidelines for those who have
retired and wish to return to employment as a lobbyist, representative, or
contractor doing business with the state in some capacity. The "Leaving State Government Handbook" publication below helps shed light on those statutes and how they govern some aspects
of reemployment.