Updated October 21, 2026. Quick answer: The Illinois SERS Tier 2 handbook has a section for members who go back to work after retiring. It separates short, nonpermanent reemployment from permanent reemployment and says what happens to the pension in each case. The handbook’s first instruction is to tell the SERS Claims Division.
What this section covers
The section is headed “RETURNING TO EMPLOYMENT AFTER RETIRING” in the State Employees’ Retirement System of Illinois, Tier 2 Active Member Handbook. It opens: “If you return to state employment or full-time employment covered by a reciprocal system after retirement,” “you must notify the SERS Claims Division immediately.”
This is one slice of the larger picture in Illinois SERS retirement decisions and pension and annuity decisions.
Who it applies to
The handbook states its scope at the front: “This information applies to all active State employees who first became a member of SERS or a reciprocal system after December 31, 2010.” It defines the tier the same way in its glossary: “Any individual who first becomes a member of SERS or a reciprocal system after December 31, 2010”.
Inside the section, the rule that applies depends on the kind of work. The handbook’s headings are “Nonpermanent Reemployment” and “Permanent Reemployment”, and contractor work for another agency is addressed in the opening paragraph.
The rules, one by one
| Rule | What the handbook says |
|---|---|
| Tell SERS | “you must notify the SERS Claims Division immediately.” |
| Contractor work | “If you become employed as a contractor by an agency other than the agency from which you retired, you may continue to receive your retirement benefit.” The statute is narrower on who may keep the pension and who must tell the system: 40 ILCS 5/1-160(h) suspends the annuity of a person who first became a member “on or after January 1, 2012” and “accepts on a contractual basis a position to provide services to a governmental entity from which he or she has retired”, and requires notice “before accepting contractual employment” to the retirement system and the contractual employer, on pain of a Class A misdemeanor and a $1,000 fine. |
| Nonpermanent reemployment | “If your reemployment with the State lasts 75 working days or less during a calendar year (any part of a day is counted as a full day), you will continue to receive your pension payment.” |
| Contributions during nonpermanent work | “If reemployed in this manner, you will make no contributions to SERS, but you must contribute to Social Security.” |
| Past the limit | “If you work more than 75 working days, your pension benefit will be suspended on the 76th day, and you will resume contributing to SERS.” |
| Certification | “must be certified by the member and the employing agency and submitted to SERS for verification.” |
| Permanent reemployment | “your SERS pension benefits will be suspended while working.” |
| Contributions during permanent work | “If you are reemployed by the State, you will make contributions to both SERS and Social Security during your employment and earn additional service credit.” |
| Retiring again | “After you retire, you must reapply for a pension.” “your new pension amount will be the monthly amount you received at the time of reentering service, plus an amount calculated on the service and earnings credit obtained during reemployment.” The Retirement Code caps the total: 40 ILCS 5/14-111(b) says it “shall not, however, exceed the maximum applicable to the member at the time of original retirement”. |
| Pensions from several systems | “If you receive a pension from more than one reciprocal system, you must notify each system of your reemployment.” |
The figures the handbook prints
Two figures drive the nonpermanent rule, and both sit in one sentence: “If you work more than 75 working days, your pension benefit will be suspended on the 76th day”. The handbook also counts partial days: “any part of a day is counted as a full day”.
A separate time limit applies to going back to the State and having the benefit recomputed: “If you reenter state service within three years after retiring, you may qualify to have your prospective retirement benefit computed as though you never retired.” The handbook attaches a condition: “you must repay all of the pension benefits received prior to reemployment with interest.”
The statute sets the payment terms. 40 ILCS 5/14-111(b) requires the repayment “within 5 years after re-entry and prior to subsequent retirement, in a lump sum or in installment payments in accordance with such rules as may be adopted by the Board”, with “regular interest from the date retirement payments were suspended to the date of repayment”.
What to do and where to look
The handbook names the Claims Division as the place to notify. For the application side it says “In order to receive any benefit, you must apply for it with the Claims Division and provide proof of your age.” and “Your agency’s Retirement Coordinator can assist you in filing a claim.”
It also describes how to prove short work: the 75 day count “must be certified by the member and the employing agency and submitted to SERS for verification.” For questions on how pension income is taxed in Illinois, see whether Illinois taxes pensions.
Edition
This page reads the State Employees’ Retirement System of Illinois, Tier 2 Active Member Handbook, the current file the Illinois State Employees’ Retirement System served on October 21, 2026. Check the edition and your own tier or plan on your own member account; the handbook’s text controls over this summary.
Common mistakes
- Counting only full days. The handbook says “any part of a day is counted as a full day”, so a short shift still uses a day of the limit.
- Assuming contractor work always keeps the pension flowing. The sentence covers “a contractor by an agency other than the agency from which you retired,” and says nothing broader.
- Waiting to tell SERS. The handbook’s instruction is “you must notify the SERS Claims Division immediately.”
Related: Illinois SERS retirement decisions, public pension retirement decisions, pension and annuity decisions, and whether Illinois taxes pensions.
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Answer againSources
- State Employees’ Retirement System of Illinois, Tier 2 Active Member Handbook: ilsrs.illinois.gov
- Related official page (not quoted): State Employees’ Retirement System of Illinois home page: ilsrs.illinois.gov
Read from the pension system handbooks linked above on October 21, 2026. General information, not tax advice. Your own facts decide the outcome, and a pension system or a qualified professional is the right place to confirm anything consequential.