Members Must Have Bona Fide Termination from NYS Public Service to Retire
Internal Revenue Service (IRS) rules and the Retirement and Social Security Law (RSSL) require ERS, PFRS, TRS and ORP members have a bona fide termination from all public service prior to their date of retirement. Bona fide termination is defined as a member stopping paid service with their employer prior to their date of retirement. In addition, a member and employer must have no prearranged agreement to return the member to service after their date of retirement. While this has always been a longstanding requirement, compliance is now receiving increased legal and administrative scrutiny.
In determining whether a bona fide termination exists, factors that NYS will consider include but are not limited to:
- Whether a member officially resigned from all NYS public employment prior to their requested date of retirement. A letter of resignation and/or board meeting minutes may be requested as supporting documentation.
- The length of a member’s separation from employment following their requested date of retirement. Members must have a minimum of a business day off payroll and fully retired (weekends and holidays do not count).
- Whether an agreement existed with the employer prior to a member’s requested date of retirement to resume employment following the requested date of retirement.
Where the employer and member expect the member will return to employment after their date of retirement, the member risks the termination not constituting a bona fide termination. If there is no bona fide termination, the service retirement application will be voided. Any pension payments made in error due to a retirement that was invalid will be recovered by the Retirement System.
Under RSSL Sections 211 and 212, retirees may work in NYS public employment in retirement with certain limitations. Notwithstanding these sections, however, a prearranged agreement to rehire the employee risks the termination not constituting a bona fide termination.
RSSL Section 211: https://www.nysenate.gov/legislation/laws/RSS/211
RSSL Section 212: https://www.nysenate.gov/legislation/laws/RSS/212
The only exception permitted by the RSSL: Elected officials may continue serving their current term; however, they are still restricted by all post-retirement earnings limitations outlined in Sections 211 & 212.
More information about post-retirement earnings is available at suny.edu/retirement or contact the Benefits Office.