Rehire Retiree Guidelines – Waiver is Extended through 2027
To assist employers with filling open positions due to labor shortages or increased needs arising from COVID-19 related factors, there will be a temporary adjustment to MERS rehired retiree requirements. Retirees who return to work due to employer need will not have their pension benefits suspended if they exceed the 1,000 hours in calendar years 2022 through 2027. The bona fide separation of 60-days is applicable and a Working in Retirement certification (form 29c) is required to be on file.

Michigan’s Work Share program allows employers to restart their business and bring employees back from unemployment. Employers can bring employees back with reduced hours while employees collect partial unemployment benefits to make up a portion of the lost wages. Employers can also retain their current workforce and are given the flexibility to choose which of their employees are part of the Work Share plan. For employers who choose to participate in the state’s program, employees are not considered terminated.

The MERS Plan Document does not specify how service and contributions may be impacted for this unique circumstance and therefore, MERS is unable to issue specific guidance to employers on the requirements of the Michigan Work Share program. As the program does reference impacts to employers fringe benefits, MERS encourages participating employers to consult tax or benefit professionals to determine what impacts this program has on benefits like pension, health and deferred compensation for your organization.  Based on that determination, MERS will provide instructions for monthly wage and contribution reporting tools.

Instructions or support for reporting within these elections should be directed to the MERS Service Center at 800-767-MERS. Questions about the Michigan Work Share program should be directed to Michigan’s Unemployment Insurance Agency.

The MERS Retirement Board approved waiving the 1,000 hour suspension for any rehired retiree who meets the 60-day separation between last day worked and returning work day. Employers are asked to continue reporting those who are returning, including providing a Working in Retirement certification form for MERS records. Suspension on retirement payments has been lifted through the 2027 calendar year.

An employee that is laid off is not considered an active employee and should be reported as terminated and are not eligible to earn service as defined by the MERS plan document. An employee layoff is not the same as reduced hours or employees on “furlough” or a situation where an employee is on paid or unpaid leave. If the employee is terminated and receiving unemployment, there is no ability to earn service credit. If the employee is on paid or unpaid leave, service can be granted if the employer elects to do so. Please note that all employees in the division must be treated the same.