Pension Question for Police Officers Returning to Work Part-Time

A police department has part-time hourly officers who are not in the Article 3 Fund, and the department may hire back some of their own retirees temporarily because of staff shortages due to COVID-19. When asked if this would impact the officers’ pensions, our opinion is that they can be hired into a position not covered by Article 3. However, another question posed is will there be tax ramifications of going back to work for the same town before the age of 59.5?

Answers:

• If the member is being rehired into a police officer role, they must (re)join the Article 3 Fund and their retirement benefit must be suspended.
• If the member is being rehired into a non-police officer role, they can continue to collect their retirement pension and if they are unter the age of 59.5, their 2020 1099R will reflect a “1” in Box 7.