Working After You Retire

This section explains how you can lose benefits or earn additional benefits if you go back to work after retirement. You should review this information even before you retire.

Topics below:

How Returning to Work Affects Your Benefits
Suspension of Benefits Rule
Suspendible Employment
Applicable Hours Limits
Reemployment Reporting Requirements
Suspension of Benefit Payments
Re-Starting Your Suspended Benefits
Special Rules
Annual Retiree Certification
Increasing Your Benefit After Retirement

How Returning to Work Affects Your Benefits

This chapter explains how you can lose benefits if you go back to work in covered or non-covered suspendible employment after retirement. If you are considering a return to work after retirement—in covered or non-covered employment—you need to know about your Plan’s suspension of benefits rule before you accept a job. These rules are explained starting on this page.

The Plan also has rules that allow you to increase your retirement benefits if you return to work in covered employment after retirement and work a certain number of hours. Click here for the rules about Increasing Your Benefit After Retirement. Page Top link

Suspension of Benefits Rule

Under the Plan’s suspension of benefits rule, you can lose benefits if you return to work in suspendible employment before age 65. These rules provide that you forfeit the right to receive your age retirement benefit for any month you work in suspendible employment and the hours you work equal or exceed the applicable hours limit explained below. A more detailed explanation follows below.

The suspension of benefits rule also requires that you notify your Area Administrative Office in writing whenever you return to work in any type of employment. Also, each year you must complete an Annual Retiree Certification form. These Reemployment Reporting Requirements are explained below.

If you are thinking about returning to work, you can ask your Area Administrative Office, in advance, to give you a written evaluation that tells you whether your job will qualify as suspendible employment and whether you will lose retirement benefits if you work in that job at or above the applicable hours limits. The Applicable Hours Limits are explained.

The Plan’s suspension of benefits rule applies if you are under age 65 and receiving an age retirement benefit. After you turn age 65, these rules don’t apply to you. You can work as much as you want, in any kind of job, without worrying about forfeiting your monthly benefit.

Note: If you retire on a disability retirement benefit and return to work, the Plan’s suspension of benefits rule does not apply to you. But you may lose your entitlement to Social Security disability benefits by working and as a result, lose your right to receive disability retirement benefits from the Plan. Page Top link

Suspendible Employment

Explanation of Suspendible Employment
Suspendible Covered Employment
Your covered employment as a retiree is suspendible employment if it meets all of the following tests. The work must be in:

  1. A trade or craft in which you worked at any time while covered by the Plan before your retirement, and
  2. Any industry covered by the Plan when you retired (even if you never worked in that industry before retirement), and
  3. Any geographic area covered by the Plan when you retired (even if you worked in a different location before retirement).

Definition of covered employment: This is work you perform for an employer who is obligated to make contributions to the Pension Trust on your behalf under a pension agreement.

Suspendible Non-covered Employment
Your non-covered employment (including self-employment) is suspendible employment if it meets all of the following tests. The work must be in:

  1. A trade or craft in which you worked at any time while covered by the Plan before your retirement, and
  2. An industry in which you worked at any time while covered by the Plan before your retirement, and
  3. Any geographic area covered by the Plan when you retired (even if you worked in a different location before retirement).

Definition of non-covered employment: This is work you perform that is not covered under a pension agreement.

Testing for the Suspension of Benefits Rule
The Plan applies three separate tests to determine whether your after retirement work is subject to the Plan’s suspension of benefits rule. They are:

For your reemployment to qualify as suspendible employment, the Plan must determine that your employment meets all three of these tests. In other words, if the Plan determines that your employment fails to meet any one of the three tests, that specific work will not qualify as suspendible employment.

The tests are different depending on whether your work is in covered or non-covered employment. The chart on the previous page explains the difference between suspendible covered employment and suspendible non-covered employment.

The charts to the right explain in more detail the three tests. They are intended to serve only as an informational guide. If you are actually considering returning to work after retirement (or are already working as a retiree), you should not attempt to apply these tests on your own.

If you make a mistake in interpreting or applying any of these tests, you can suffer serious financial consequences as a result. Instead, any time you are considering reemployment, always ask your Area Administrative Office for a formal evaluation of your proposed work. That is the only way you can find out for sure whether your work will be suspendible employment.

Test 1—Trade or Craft
When testing for trade or craft, the Plan compares your job after retirement with the job you worked in as a covered employee before retirement. The Plan looks at broad categories of jobs to determine whether two jobs are in the same or different trades or crafts. For example, if your job before retirement was driving some type of motor vehicle and your after retirement job involves driving a motor vehicle of a different type or size or with a different purpose, both jobs will likely be considered in the same trade and craft since they both involve driving a motor vehicle, even if the two jobs involved hauling different kinds of cargo or materials. You also are considered to be working in the same trade or craft if you are supervising personnel who use skills that you used as a covered employee before your retirement.

Test 2—Industry
When testing your employment for industry, the Plan first considers whether your employment is in covered employment or non-covered employment.

If your job is in non-covered employment, this test would be met if the industry your employer operates in is an industry you worked in before retirement.

If your job is in covered employment, this test is met if the industry your employer operates in also includes employers who contribute to the Pension Trust. Unlike non-covered employment, the industry does not have to be one you actually worked in before you retired.

The Plan looks at broad categories of business activities to determine what industry an employer is engaged in. For example, if your employer’s primary business activity is hauling items for a third party, the employer most likely will be considered to be part of the freight industry, even if the items being hauled are building materials, debris, dirt, petroleum products, automobiles, or the like. Some contract haulers transport goods and materials for companies in many different industries such as oil refiners, wholesale or retail grocers, construction contractors or the U.S. Postal Service. That does not mean that these contract haulers are engaged in the industry of the company for which they are providing transport services. Because they are a third-party hauler, they are considered part of the freight industry.

Test 3—Geographic Area
When testing for geographic area, the Plan considers whether your job is in the geographic area covered by the Plan. This area includes all of the 13 Western states (including Alaska and Hawaii). In some cases, work outside the 13 Western states may be considered within the geographic area of the Plan (ask your Area Administrative Office for specifics). Page Top link

Applicable Hours Limits

Under your Plan’s suspension of benefits rule, your pension benefits will be suspended if your hours of work in suspendible employment exceed certain hours limits. You will lose the right to receive your retirement benefit payment for any calendar month if the hours of suspendible employment you work (or are paid for) equal or exceed your applicable hours limit for that month. Your Plan counts hours that you actually work as well as hours for which you are paid (such as vacation, jury duty, sick leave or other paid hours). See below for the applicable hours limits rules.

If you are paid on a basis other than hours worked, such as mileage, your hours of suspendible employment are determined using the same formula that determines the number of hours for which your employer is required to make contributions to the Pension Trust. Contact your Area Administrative Office if you have questions regarding how the mileage rules apply.

A special rule applies if the Plan cannot determine how many hours of suspendible employment you actually worked in a month. Under that rule, the Plan considers that you worked in suspendible employment in excess of your hours limit for that month if:

Applicable Hours Limits

Up to Age 60
If your reemployment occurs in a month that begins prior to or includes your 60th birthday, you will forfeit your monthly benefit if you work 50 or more hours of suspendible employment in that month.

Ages 60 to 65
If your reemployment occurs anywhere between the month following your 60th birthday and the month ending with your 65th birthday, you will forfeit your monthly benefit if you work 85 or more hours of suspendible employment in that month.

After Age 65
If your reemployment occurs in a month after your 65th birthday, you can work any number of hours and your benefits will not be suspended. Page Top link

Reemployment Reporting Requirements

If you decide to go back to any kind of work (covered or non-covered) after you retire and you are under age 65, Plan rules require that you notify your Area Administrative Office before you start your job. You must do so even if you think your work is not suspendible employment. That way you can find out beforehand if your work may cause you to lose any benefits. The financial consequences of failing to follow this reporting requirement could be severe. Once you are age 65 or older, there are no reporting requirements.

If the Pension Trust finds out that you are working before age 65, and you have not already reported it, your benefit payments may be suspended while your Area Administrative Office gathers more information about whether your work is suspendible employment.

Contact your Area Administrative Office as soon possible if you are considering returning to work. Do not wait until after you have already begun working. Your Area Administrative Office will provide you with a Request for Evaluation of Reemployment form to complete. Click here to download a form.

On the Request for Evaluation of Reemployment form, you must provide enough information about your work, including the number of hours you expect to work. If you do not know your work schedule, provide your best estimate of the hours you will work. This information helps the Plan determine whether your work is suspendible employment and whether your hours each month equal or exceed your hours limit.

The form asks that you describe the work you will perform (such as driving a truck, working in a warehouse, packing produce, etc.). It also asks you to explain the skills required and whether or not you learned any of those skills during the time you were employed in covered employment before you retired. The industry of your employer is very important, especially if you are returning to non-covered employment. If you are not sure, ask your employer. If you are considering more than one job, you are required to complete a form for each.

Note: Determinations cannot be made on hypothetical jobs. The Pension Trust can only make a determination on actual jobs you are considering for a specific employer. If you have a job description from your employer, include it with your request form.

Allow your Area Administrative Office approximately 30 days to review your request and forward you a determination. If the reemployment you have asked your Area Administrative Office to review is determined to be suspendible employment, your Area Administrative Office provides you with information about the Plan’s suspension of benefits rule and how you can appeal the decision. The Reemployment Checklist below helps you through the steps you should follow to obtain an official determination about how your proposed reemployment will impact your retirement benefits.

Reemployment Checklist
It is extremely important, that if you are considering going back to work before age 65, you take the following steps before you begin working, to avoid any overpayment of your benefits.

First: Find out the following information on your new job before you start:

  • Is the employment you are considering covered or non-covered employment?
  • What is the primary industry of your employer?
  • What is your job description, including skills you will use? Ask your employer for a job description.
  • Is the area of your employment in the 13 Western states?

Second: Obtain from your Area Administrative Office or click here to download and print a Request for Evaluation of Reemployment form. Complete the form and include the information you gathered in step one. Return the form with the completed information.

Third: Your Area Administrative Office will provide you with a written evaluation of whether your work is suspendible employment. If it is suspendible employment, your retirement benefits will be subject to the Plan’s suspension of benefits rule. You then will be able to decide whether you want to accept the job and forfeit all or a portion of your retirement benefits if you work at or above the Plan’s hours limit. Page Top link

Suspension of Benefit Payments

If your work after retirement qualifies as suspendible employment, your retirement benefits are subject to either full or partial suspension under the Plan’s suspension of benefits rule. The suspension of benefits rule is applied to each month you worked in excess of the applicable hours limit.

The suspension of benefits rule explained in this chapter is effective July 1, 2004 (different rules apply to reemployment before July 2004). The percentage of your current retirement benefit that is subject to the suspension of benefits rule depends on whether your reemployment is in covered or non-covered employment.

If your work is in covered suspendible employment, 100% of your monthly retirement benefits are subject to suspension. If your work is in non-covered suspendible employment, only the portion of your retirement benefit that you earned after 1994 is subject to suspension. You continue to receive the portion of your retirement benefit that you earned up through December 31, 1994—your protected percentage. Click here for an example.

If your benefits are subject to suspension because of your reemployment, you are sent a notice during the first month for which your benefits are suspended, telling you what is being done and why.

Once your benefits are suspended because of your reemployment, you lose your right to receive retirement benefits as long as you are under age 65 and continue working in suspendible employment at or above your hours limit. If you do receive benefit payments for any months when your hours of suspendible employment equal or exceed your hours limit, you must repay these amounts to the Pension Trust. You can repay these amounts by check or the Plan will deduct the amounts you owe from any future benefit payments including benefits payable after your death.

Your benefit payments do not resume unless you provide satisfactory evidence that you worked less than your applicable hours limit each month or that your work is not suspendible employment. Page Top link

Re-Starting Your Suspended Benefits

If your retirement benefits are suspended because you return to employment, your benefits are not re-started until you complete and file a Benefit Resumption Notice with your Area Administrative Office.

This notice must be filed once you stop working in suspendible employment, turn age 65 or your hours of suspendible employment fall below your applicable hours limit. You can request this notice from your Area Administrative Office.

If you still owe any amounts when your benefits restart, they will be deducted from your first monthly benefit payment. If your first benefit payment is not enough to recover what you owe the Pension Trust, 25% of your future benefit payments are withheld until the entire amount is repaid. If you die before all amounts you owe the Pension Trust are repaid, the balance will be deducted from any death benefits otherwise payable to your Plan beneficiary and if necessary, from any monthly benefits payable to your spouse (subject to the 25% rule). Page Top link

Special Rules

Grandfather Protection
If you retired and began receiving Plan benefits before May 1994, only covered employment is considered suspendible employment. If this applies, you can work as much as you want in any non-covered job without triggering a benefit suspension.

If you retire and begin receiving Plan benefits after April 1994, a special suspension of benefits rule may apply if you worked in non-covered employment during May of 1994. They only apply if you have not worked in any covered employment since April of 1994. Your Area Administrative Office can give you more information about these special rules and whether they apply to you.

Additional Protection
A special suspension of benefits rule may apply if you return to work in non-covered employment and in an industry different from any industry you worked in before retirement. Under these rules, if the unit you are working in later becomes covered by the Plan, your retirement benefits will not be suspended when your work for that employer changes from non-covered to covered employment.

This special rule no longer applies if you go to work for another employer. Your Area Administrative Office can give you more information about these special rules and whether they apply to you. Page Top link

Annual Retiree Certification

Each year the Plan sends an Annual Retiree Certification form to all age retirees under age 65. On this form, you must list all work performed in the previous calendar year. You may also be asked to authorize the Pension Trust to obtain verification of your earnings for the year from Social Security.

Plan rules require that you complete and return the Annual Retiree Certification form within 30 days. (The annual certification requirement is waived for calendar years after your 65th birthday.)

If you are under age 65 and do not return the completed Annual Retiree Certification form to your Area Administrative Office by the deadline, your monthly benefits are suspended until you provide the required information.

Benefits are also suspended if your completed Annual Retiree Certification form shows that you worked in the previous calendar year but does not provide enough information for the Plan to determine if your work is suspendible employment, or if your hours equaled or exceeded the applicable hours limit in any month.

As long as you are under age 65, your benefits will continue to be suspended until you provide satisfactory evidence that you either worked less than your hours limit per month or that your work is not suspendible employment.

If you have properly followed the Plan’s rules for notification of any reemployment, the Annual Retiree Certification form will likely serve to simply confirm the information you have already provided to the Plan. As explained on page 90, the Plan requires you to promptly notify your Area Administrative Office in writing any time you return to work in any capacity before your 65th birthday. If you first notify your Area Administrative Office on the Annual Retiree Certification form, the financial consequences can be severe if it is found you were performing suspendible employment. Page Top link

Increasing Your Benefit After Retirement

If you return to covered employment after retirement, you may qualify for increased benefits once you again retire. There are two ways you can increase the benefit you are receiving:

Reemployment Pension Increase
A pension increase is separate from your original retirement benefit and is payable in addition to your original amount. The increase is based only on the basic contributions paid on your behalf during your period of reemployment. In some cases, your increase may also include a noncontributory service benefit based on past employment or intermediate employment. Your Area Administrative Office can provide you with additional information if you think you may be eligible.

If you take normal or early retirement, there are two ways you qualify for a pension increase:

If you take disability retirement, the Plan only looks at your covered hours after age 65 to see if you qualify for a pension increase. The earliest date you can receive your pension increase is January 1 following the year when you qualify.

Applying for a Reemployment Pension Increase.
Before you can receive your pension increase you must do all of the following:

If you stop work, or are about to stop work in covered employment as a retiree, you should contact your Area Administrative Office as soon as possible to find out if you qualify for a pension increase. They will give you an application to complete on which you can choose your desired pension effective date. Under the Plan’s retro-payment rule, your pension effective date can be no more than two calendar months from the date your Area Administrative Office receives your application (three calendar months if your application is received on the first day of the month). It is best to get your application on file as soon as you decide to stop working. For additional information, see Retro Payment Rule.

Note: If you have previously qualified for a pension increase after the year in which you turn age 65, you do not need to apply for any later pension increases for which you may qualify. Your pension increase will automatically start, as explained below.

When You Must Apply for a Pension Increase.
When you apply for a pension increase, the amount is considered separate from your original benefit. Since your pension increase is a separate benefit, you can choose a different benefit payment option for your pension increase than you chose for your original retirement benefit, as long as the increase takes effect by January 1 of the year after you turn age 65. If you are married, your spouse is required to consent to your election. See Spouse Consent Requirements.

Once your Area Administrative Office verifies your eligibility for the increase, you are sent an information packet containing your personalized Benefit Election Form that explains the payment options available for your pension increase. The amounts shown are based only on the basic contributions paid for your covered hours during your period of reemployment. They are paid in addition to your original benefit. For details about making your pension choices, see Your Benefit Payment Choices.

Your Plan’s suspension of benefits rule also apply to your pension increase. If you are under age 65 and go back to suspendible employment after your pension increase starts, both your original benefit and your pension increase are suspended for any month when your hours of suspendible employment for the month equal or exceed your hours limit.

Automatic Pension Increases.
If you have previously qualified for a pension increase after the year in which you turn age 65, you do not need to apply for any later pension increases for which you may qualify. Your pension increase starts automatically. The Area Administrative Office notifies you if you are eligible for this automatic increase. Once the amount of your automatic pension increase is calculated, payment begins retroactive to the beginning of the calendar year after the year in which you qualify. If you have questions about the status of your reemployment pension increase, the Area Administrative Office recommends that you contact them in June, following the year in which you meet the eligibility requirements.

Total Benefit Recomputation
With a total benefit recomputation, your original retirement benefit is canceled and replaced with a completely new benefit. Your new benefit is based on your covered hours and basic contributions earned before your original retirement plus the covered hours and basic contributions you earn after your original retirement. Your new recomputed benefit is based on your age on your new pension effective date and is adjusted to reflect the value of all benefit payments you already received.

There are two ways you qualify for a total benefit recomputation:

If you take disability retirement, you cannot qualify for a total benefit recomputation.

If you return to covered employment after retirement and would like to find out if you are eligible for a total benefit recomputation or pension increase, contact your Area Administrative Office.

Applying for a Total Benefit Recomputation.
Before you can receive your total benefit recomputation you must do all of the following:

If you apply for a total benefit recomputation, your application is processed using the rules and procedures explained in the Applying for Retirement Benefits section.

If you are under age 65, your Plan’s suspension of benefits rule also applies to your new recomputed benefit. The rules apply beginning with your new pension effective date.

Click here for questions and answers about Working After You Retire. Page Top link