Hiring an IMRF Retiree

Contact IMRF if you hire an IMRF retiree

Many factors are involved in determining if a retiree’s pension will be affected by a return to work. If you are aware that you are hiring an IMRF retiree, you should contact IMRF regardless of the hourly standard of the position the retiree will hold. In addition, the retiree must also contact IMRF before he or she accepts the position to discuss how his or her pension may be affected. Failure to inform IMRF of a return to work that qualifies for IMRF participation could result in significant financial repercussions for a retiree.

(This also applies to newly elected/appointed officials, if the office is one where they previously earned any IMRF pension credit, or if they elect to participate in IMRF while in a brand-new office.)

For more informtaion, you can also read the "Returning to Work After Retirement" brochure for members.

You can also print a flyer to give to an IMRF retiree who is considering a return to work at your employer.

What about Independent Contractors?

Some employers think that hiring an IMRF retiree as an independent contractor will avoid any potential consequences to the retiree’s pension. This is not always the case. A retiree’s pension could be affected by working as an independent contractor if:

• The retiree retired under the Early Retirement Incentive (ERI). If an ERI retiree returns to work for any IMRF employer in any position, even as an independent contractor, his or her pension will be affected. Not only will the pension be suspended, but severe financial penalties apply.
  
• The retiree is incorrectly classified as an independent contractor. In this case, even if the retiree did not retire under an ERI, his or her pension could be affected. In addition, if you have incorrectly classified an employee (including non-retirees) as an independent contractor, you are subject to assessment for retroactive IMRF contributions, and you may be held liable for employment taxes for that employee.
  

The Internal Revenue Code has specific requirements for what qualifies as an IndependentContractor classification. For detailed information, see section 3.60A of your Manual for Authorized Agents, or visit Topic 762 on the IRS website.