Retiree restrictions tightened

Many retirees have found a place working support jobs in the school system. Those jobs supplement their pensions, whether that’s as a substitute teacher, bus driver, librarian or another role.

There are some restrictions in place however and with the passing of House Bill 360 earlier this year, they’ve tightened.

While not causing any major disruptions in the local school districts, these changes have affected several employees.

HB 360’s focus was to increase employer contribution to Educator’s Retirement Fund (ERA) by amending the Educational Retirement Act. But it also changed the circumstances in which a retiree can use the Return to Work program while accessing their retirement pensions. It also added a requirement for employees benefiting from the Public Employees Retirement Association (PERA) to pay into the ERB.

Previously, retired educators had to set aside 12 months before returning to work, earn only 25 percent of what non-retirees would earn in the same role or earn less than $15,000 a year. Most went with the $15,000 limit, but HB 360 removed that option.

According to Joe Strickland, deputy superintendent of employee services at Clovis Municipal Schools, this has affected about six of the roughly 220 substitutes the district employs.

“On the surface it appears unfair, but this applies to teachers who did not stay out a full year before they returned to work,” Strickland said. “If a person sets aside a full year before returning to work they can come back no problem, but otherwise they’re restricted to that .25.”

Strickland said this has mainly affected several of the district’s substitute teachers who had never set aside that time in the past. After speaking with state legislators, Strickland was told the IRS advised the change so workers would have to go through a full termination before receiving retirement benefits.

“If you immediately go back to work more than that .25, it looks like you never really retired and that instead you just wanted to pull out your retirement,” Strickland said. “We had several long-time subs who have worked for us for years, but had never laid out that year off.”

Strickland said the Clovis school district was in a good position when the bill was passed and was able to recruit new substitute teachers to offset the loss, though it lost some experienced, long-time substitutes.

Portales Municipal Schools Superintendent Johnnie Cain said his district was in a similar situation and had roughly 12 employees who were affected by this change — many of whom will simply sit out a year so it won’t hurt their retirements.

These employees range from substitutes, to bus drivers and even one of the school librarians.

Cain said HB 360 has also had an impact on the district’s hiring pool, with retirees from the PERA program reluctant to come work for the district and be forced to pay into the ERA fund, which they will never have the opportunity to benefit from.