Assistant Director for Research
Director of Legislative Research
Recent Trends in Retirement
The U.S. Census Bureau recently released its 2021 Survey of Income and Program Participation (SIPP), which collected data on labor force status for respondents in 2020. The data indicated the COVID-19 pandemic’s impacts included significant disruption of labor markets but only a modest impact on people’s retirement timing.
The Census Bureau added new questions to its 2021 SIPP to ascertain how the pandemic affected survey respondents. Respondents ages 55 and older indicated “modest changes” to their retirement (or expected) timing. Among those respondents employed in January 2020, the impact on retirement timing differed by age. Adults ages 62-65 reported the most changes, with 4.6 percent indicating they had retired early or planned to retire early, and 2.9 percent indicating they had delayed or planned to delay retirement.
The Retirement Experience – Kansas Education
The Commissioner of Education advised a House committee in February 2022 of the “tremendous” impact of the pandemic on the number of licensed teachers, substitutes, certified staff, principals, and superintendents.
From 2020 to 2021, the Kansas State Department of Education (KSDE) noted a 63.0 percent increase in the number of teacher vacancies, with the greatest number seen among special education and elementary teachers. It is anticipated the greatest shortage of qualified staff will occur in school year 2022-2023.
In January 2022, the State Board of Education took emergency action to allow certain individuals to work with a Temporary Emergency Authorized License (TEAL) until June 1, 2022.
Working After Retirement – Public Employees
Members of KPERS (the Kansas Public Employees Retirement System) who opt to return to work for a KPERS employer after retirement are subject to the following statutory rules:
- Waiting Period (before being rehired). 180 days for members retiring before age 62 and 60 days for members retiring at age 62 or later.
- No Prearrangement. Before a member’s retirement and during the waiting period (60 or 180 days), retirees and employers cannot communicate in any way about a return to work. (Note: The Internal Revenue Service requires a bona fide retirement before a member begins to receive retirement benefits. This equates to a formal termination from covered employment and a lack of agreement to return to work.)
- Employer Contributions. If a retiree returns to work in a covered position, the employer (state/school or local) makes contributions to KPERS to help fund the Retirement System. Employers must pay the statutory contribution rate for the first $25,000 of the retiree’s salary and a 30.0 percent contribution rate on earnings over $25,000.
Note: Covered positions are not seasonal or temporary; individuals would be employed for 630 or more hours of work per year for school employers or 1,000 or more hours of work per year for non-school employers.
2022 Legislation – Reducing the Waiting Period and Certain Working After Retirement Restrictions
The House Committee on Insurance and Pensions held hearings on two working-after- retirement bills during the 2022 Session – HB 2593 (would have established a 60-day blanket waiting period for all retirees hired by a school district, ending June 30, 2024) and HB 2639 (would have established a blanket 30-day period for all retirees hired by a KPERS employer, ending June 30, 2023).
Following a combined hearing on both bills, the House Committee advanced HB 2639, as amended. The amended bill did not contain temporary adjustments to the waiting period and instead addressed the threshold associated with the employers payment of the 30.0 percent contribution (from $25,000 to $27,500) and also permitted the rate to be suspended for one year for any retiree who has been retired for at least one year. For these retirees, the employer would be required to contribute the statutory rate on all compensation (the provision would have expired on June 30, 2023). No further action was taken on the bill.
The Legislature has periodically reviewed working-after-retirement provisions during both the legislative session and the interim (such as in the Joint Committee on Pensions, Investments and Benefits). Changes to these rules would require introduction and enactment of legislation to specify exceptions to the waiting period(s) or employer contributions.