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Focus on New Laws: Pension Contribution Required for Re-Employed Annuitants
Effective Jan. 1, 2027, employers will have to provide pension contributions for retirees who return to work.
Employees who have retired, begun collecting their pension benefit, and are subsequently re-employed by a public employer are referred to as “re-employed annuitants.” Currently, when a city has a re-employed annuitant on its payroll, neither the city nor the employee makes a pension contribution to the Public Employees Retirement Association (PERA).
A provision in the omnibus pension bill, enacted as 2026 Session Law Chapter 106, will change this for public employers by requiring them to continue making the standard employer contribution to PERA.
What cities need to know
Beginning Jan. 1, 2027, cities will be required to make the standard PERA contribution for re-employed annuitants on their payroll who would otherwise qualify for a pension benefit upon retirement. Note that this change applies only to the employer contribution — re-employed annuitants will not be required to begin making PERA contributions in 2027.
City operations and payroll practices will not change for the remainder of 2026 with respect to re-employed annuitants.
The contribution rate for re-employed annuitants is the standard employer contribution rate for the applicable plan. For members of the Coordinated Plan and the new Probation Officer and Telecommunicator Plan, the employer contribution is 7.5% of salary. For members of the Police and Fire Plan, the employer contribution is 17.7% of salary.
If you have any questions, contact League Intergovernmental Relations Representative Owen Wirth at [email protected], the League’s human resources team at [email protected], or PERA directly.