Updated October 21, 2026. Quick answer: The Montana PERS handbook says a retiree can work in a PERS-covered job without becoming an active member only with no agreement to return, at least 90 days of retirement and within the working retiree limits. Under age 65 the limit is 960 hours a calendar year, from 65 to under 70 and a half it is 960 hours or an earnings limit, whichever is higher, and from 70 and a half there is no limit. A full-time PERS-covered job cancels the benefit and returns the retiree to active membership.
What this covers
The handbook’s Circumstances Affecting Benefits section has a part headed PERS Working Retirees. It opens “As a retiree, you might wish to work in a job covered by PERS.” The membership section adds that a retiree “may work in a PERS-covered position without becoming an active member if you adhere to the working retiree hour and wage limits.” This page follows both and quotes them. The wider set of choices is on Montana PERS retirement decisions and public pension retirement decisions.
The rules, one by one
Each right-hand cell is a sentence from the handbook.
| Situation | What the handbook says |
|---|---|
| Before you start | “you cannot have an agreement with your previous employer (either written or verbal) to come back to work after you retire” |
| The wait | “you must be retired for more than 90 days before you take a PERS-covered position as a working retiree, including work performed through a temp agency or as an independent contractor.” Section 19-3-1106(1) words the wait as a retiree “who has been terminated from employment for at least 90 days”. |
| Returning before 90 days | “If you return to work before a 90-day break in service, you become an active member, your retirement will be cancelled, and your benefits must be repaid to MPERA.” |
| Under age 65 | “If you are less than age 65, and work in PERS-covered employment in excess of 960 hours, your benefit will be reduced $1 for each $1 earned from PERS-covered employment” The statute writes the 960-hour rule for one group. Section 19-3-1106(1) applies to “a retired member under 65 years of age who was hired prior to July 1, 2011”, who has been terminated from employment for at least 90 days, and allows a return “for a period not to exceed 960 hours in any calendar year”. It states no under-65 hours limit for a member hired on or after July 1, 2011. |
| Age 65 to under 70 and a half | “the limit is either 960 hours or an earning limitation, whichever is higher.” |
| Age 70 and a half or older | “If you are age 70½ or older, there are no hours or earnings limits.” |
| Full-time in a PERS-covered position | “If you return to full-time employment in a PERS-covered position, your retirement benefit will be cancelled, and you become an active member.” |
How the earning limit works from age 65
The handbook says “The earning limitation is equal to your HAC adjusted for inflation.” The statute states the limit as a sum with the benefit. Section 19-3-1106(2) lets the retiree earn in any calendar year an amount that, “when added to the retiree’s current annual retirement benefit, will not exceed the member’s annualized highest average compensation, adjusted for inflation as of January 1 of the current calendar year”, so the earnings limit is that figure less the annual benefit. “Earnings from other sources will not apply to the limit.” “Your benefit will be reduced $1 for each $1 earned from employment exceeding the limit.” It also says “MPERA reduces benefits only if you exceed the limit.”
Ending retirement instead
The handbook offers a different route: “If you do not want to be subject to working retiree hour and wage limits, you can choose to end your retirement and once again become an active PERS member.” “Notify us when you are again ready to retire, and we will calculate your new benefit.”
The benefit on a second retirement
The handbook sets out what happens to the benefit after a return to full-time PERS-covered employment, by the date of the initial retirement.
| Case | What the handbook says |
|---|---|
| Initial retirement before January 1, 2016, under two years | “your contributions will be refunded to you in the first month following your termination” |
| Initial retirement before January 1, 2016, over two years | “you will receive a recalculated retirement benefit based on provisions enacted after your initial retirement.” |
| Initial retirement on or after January 1, 2016, under five years | “your initial retirement benefit will be reinstated at the same amount paid immediately prior to returning to active service.” |
| Initial retirement on or after January 1, 2016, over five years | “a second benefit will be calculated for the new service credit based on the laws in effect as of your rehire date.” |
It adds “guaranteed annual benefit adjustment (GABA) increases will not accrue on your suspended retirement benefits when your return to full-time employment.”
What to do and where to look
The handbook says “If you are unsure if PERS covers the position, ask potential employers before you start work.” The tax treatment of the pension is on whether Montana taxes pensions.
Edition
This page reads Montana Public Employee Retirement Administration (MPERA), Public Employees’ Retirement System (PERS) Member Handbook, the current file MPERA served on 2026-10-21. Check the edition, your hire date and your own membership record with MPERA; the handbook’s text controls over this summary.
Common mistakes
- Agreeing a return date before retiring. The handbook says “you cannot have an agreement with your previous employer (either written or verbal) to come back to work after you retire”.
- Treating a temp agency or contract job as outside the rule. The handbook says it applies to work “through a temp agency or as an independent contractor.”
- Counting only PERS wages toward the limit under 65. The handbook counts “any other concurrent non-PERS covered employment with the same employer.”
Related: Montana PERS retirement decisions, public pension retirement decisions, and whether Montana taxes pensions.
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Answer againSources
- Montana Public Employee Retirement Administration (MPERA), Public Employees’ Retirement System (PERS) Member Handbook: mpera.mt.gov
- Related official page (not quoted): Montana Public Employee Retirement Administration home page: mpera.mt.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.