Massachusetts public pension retirees who go back to work in the Massachusetts public sector (state, county, municipal, city, town, district or authority) are limited to how much they can earn and how many hours they can work during a calendar year.
What are the limits for working in the public sector?
- The limits only apply to superannuation retirees who go back to work in the public sector
- The public sector is any Massachusetts public entity, whether it's for the state, county, municipal, city, town, district or authority
- Limit applies to contract employees also
- A retiree must stop working when either of the following is true:
- They have worked 960 hours in a calendar year or
- They have earned the difference between the current salary of the position they retired from and their pension.
- After being retired for one full calendar year, the retiree can add $15,000 to this calculation.
- These limits apply to the retiree only. It does not apply to a survivor receiving benefits.
Additional Resources for What are the limits for working in the public sector?
What are the limits for working in the private sector?
- Superannuation retirees do not have limits for working in the private sector
- All disability retirees are subject to the earnings limits regardless of where they work.
- See next section for information on working and collecting disability retirement benefits.
Working in retirement as a disability retiree
All disability retirees, including those retired under accidental disability, are required to submit an annual statement of their earnings (M.G.L. c. 32, § 91A). PERAC mails disability retirees an Annual Statement of Earned Income every January which they must complete on or before April 15th of each year.
All pertinent W-2 forms, 1099 forms, other requested tax forms and proof of income, and any other documentation requested by PERAC must be included with the statement.
Disability retirees are limited to working a maximum of 960 hours per calendar year if employed in the Massachusetts public sector.
Disability retirees are subject to earnings limitations regardless of where they work:
- Can earn the difference between the current salary of the position they retired from and their pension, plus $15,000.
- The $15,000 can be added right away to this calculation
- Try a quick calculation using the online Disability Earned Income Worksheet
- Frequently Asked Questions on the Annual Statement of Earned Income
If a disability retiree is returned to service under G.L. c. 32, Section 8 after reexamination:
- They will become retirement system members again
- They will receive creditable service for the years they received a disability retirement allowance, without cost
Additional Resources for Working in retirement as a disability retiree
Other options for working after retirement
Stop taking your pension
- Temporarily stop your pension while you are working and start it again once you stop working.
- You would not receive any additional benefits from your work after retirement.
- You must notify your retirement system if you would like to temporarily stop your pension.
Get reinstated under section 105
- Repay the benefits you have received while in retirement (plus buyback interest) either in a lump sum or a repayment agreement with your retirement board.
- Work an additional five years full-time before your retirement system can calculate a new retirement benefit for you.
- If you do not work an additional five years, you would receive a refund of your repayment and you would receive your original retirement benefit without any additional service factored in.
- You should carefully consider the requirements of this section before making any repayment agreements.
Be elected or appointed to certain offices
- Get elected to office by popular vote (if the position you retired from was NOT an elective office or at least one year has passed since your retirement)
- Receive a particular appointment
- You can get reinstated, however, the provisions of section 105, outlined above, will apply
Other positions where earnings limits do not apply:
- Jury duty,
- Services as an election officer,
- Certain paid appointive positions, and
- Certain emergency employment may be authorized.
Additional Resources for Other options for working after retirement
Sample earnings calculations
Joe just retired
Joe retired from his position as an accountant in July and is receiving a pension of $30,000 a year.
Joe goes back to work part-time for the town manager after retirement.
The current salary of the position Joe retired from is $50,000 per year.
Until December of the calendar year following his retirement, Joe can earn:
$50,000 - $30,000 = $20,000 per year and can work up to 960 hours per year, whichever comes first
The year after that, because he has been retired a full calendar year, Joe can earn:
$50,000 - $30,000 + $15,000 = $35,000 per year and can work up to 960 hours, whichever comes first
Joe keeps working
Joe likes working part-time and continues to work a few years into retirement. Due to Cost of Living Adjustments, Joe's pension is now $30,500 and the current salary of the position he retired from is $52,000. Joe stopped monitoring his time and took home $42,000 this year. However, he can only earn:
$52,000 - $30,500 + $15,000 = $36,500 per year or up to 960 hours per year, whichever comes first
$42,000 - $36,500 = $5,500 in excess earnings which Joe must now pay back
Joe lost track of his hours
Joe changed positions and now has a lower paying job. His maximum earnings are now $37,000 per year, but because he makes less money he has started working more hours.
Joe has earned $35,000 this year but worked 1000 hours.
He has excess earnings for the 40 hours above the 960 limit that he must now calculate and pay back.