HB 1579 establishes parameters for retirees of the Teacher Retirement System (TRS) to return to work. Individuals who retire, after the effective date of the bill, may return to work without loss of monthly benefits if they return only as (i) a classroom teacher in an acute shortage area, certified to teach as a substitute up to 90 days, half-time, or full-time up to six months in a school year that begins after their effective date of retirement or (ii) on a full-time basis if the retiree took a normal age service retirement and has been separated from service for at least twelve months.

HB 1579 requires employers to pay into the retirement fund the combined contribution rate for employees and the state for any retired employee working after the effective date of the bill. The proposal would also require employers to pay into the insurance trust fund the difference between the amount a retiree enrolled in TRS-Care is required to pay for the retiree, plus any enrolled dependents to participate in TRS-Care, and the full cost of such participation for any retiree that works after the effective date of the bill.

Under the proposal, retirees returning to work would not gain additional service credit. The impact to the annuities of individuals who retired prior to the effective date of the bill remains the same as current law. The bill would repeal the return to work exception for principals and bus drivers, as well as require employers to submit monthly reports to TRS concerning employed retirees.

The bill, if enacted, is not estimated by the TRS actuary to have a significant actuarial impact. There would be a gain to the present value of future contributions, though the significance depends on the amount of additional funding remitted to the retirement fund. If additional funding meets the agency assumptions of more than $20 million annually, there would be a reduction in the unfunded liability of over $200 million, assuming these contributions were recognized in the actuarial valuation. Additional gains could occur if there were active employees who delayed retirement due to fewer return-to-work options available.