Most members pursue personal interests after retirement — the reward for their service to the public. Some members use retirement to begin a second career. Others return to work for financial reasons. Whatever the reason there are several considerations 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, 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 reemployed retiree will earn no service credit during the period of reemployment and will not be eligible for any additional retirement benefits based upon the reemployment.
If the retiree has an initial participation date with KRS prior to September 1, 2008, but is reemployed 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 reemployed 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.
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 following publication helps shed light on those statutes and how they govern some aspects of reemployment.