Updated October 22, 2026. Quick answer: The PEBA Police Officers Retirement System handbook says a disability retiree under age 55 should report earnings from any gainful employment annually, because an earnings limitation applies for each calendar year. The retiree can earn the difference between adjusted average final compensation and the disability benefit, and returning to a covered employer at or above adjusted average final compensation ends the benefit.
What this covers
The handbook has a section headed “Returning to employment while receiving a disability retirement benefit”. This page quotes that section and the continuing disability review before it. For the wider choices, see South Carolina PORS retirement decisions and public pension retirement decisions.
The earnings limit under 55
“If you are younger than age 55 and receiving a PORS disability benefit, you should report earnings from any gainful (public or private) employment to PEBA annually because there is an earnings limitation for all employment that is applied on a calendar-year basis.” “You can earn the difference between your adjusted average final compensation (AFC) at retirement and your disability benefit without affecting your benefit.”
The yearly adjustment
“Your AFC may be adjusted each year for inflation for earnings limitation purposes only.” “This increase generally matches the percentage of the annual increase in the Consumer Price Index for Wage Earners and Clerical Workers (CPI-W).” “You will receive a letter each February advising you of how much you can earn and requesting confirmation of your prior year’s earnings.” Section 9-1-1580 of the South Carolina Code says “The average final compensation may be increased up to ten percent annually to adjust for inflation.”
What happens if you earn too much
“You will have to repay any benefits you received to which you were not entitled.” “If you earn more than the difference between your adjusted AFC and your disability benefit, your monthly benefit will be reduced or possibly canceled.” Section 9-1-1580 also says “If the disability retirement allowance is eliminated as a result of this section for a period of five consecutive years, all rights in and to his disability retirement allowance are revoked. The member then is entitled to a deferred retirement allowance as provided in Section 9-1-1650 based upon his average final compensation and creditable service at his date of disability retirement.”
Going back to a covered employer
“If you return to work with an employer covered by one of the retirement systems administered by PEBA, and your annual earnable compensation is equal to or greater than your adjusted AFC, your disability benefit ends and you must become an active member of the system.”
After 55
“After age 55, a disability retiree is subject to the same earnings limitation as a service retiree”. The handbook points to its page on retirees returning to covered work; that page is not read here.
When the benefit can be discontinued
The continuing disability review section says a benefit, once approved, “might be discontinued if:”
- “You regain a certain earning capacity; or”
- “Medical evidence indicates you are no longer disabled; or”
- “Your disability benefit was not approved following a continuing disability review.”
“Periodic medical reexaminations could be required up to age 55.” Section 9-11-80(4) says “If the system certifies that the member’s disability has been removed and that the member has regained earning capacity, the member’s disability retirement allowance may be discontinued, or if the disability has been partly removed and the member’s earning capacity regained in part, the disability retirement allowance may be reduced proportionately as provided pursuant to Section 9-1-1580.”
What the handbook does not say
The handbook prints no dollar earnings limit, because it depends on your own average final compensation and benefit. Ask PEBA for your February letter figure. South Carolina’s tax rules on pension income are on how South Carolina taxes retirement income.
Edition
This page reads the South Carolina Public Employee Benefit Authority (PEBA), Fiscal year 2027 Police Officers Retirement System Member Handbook, the file PEBA served on 2026-10-22. It covers PORS, the police system. The South Carolina Retirement System (SCRS) and other PEBA plans have their own handbooks, which this page does not read, and South Carolina law and your own PEBA account control over this summary.
Common mistakes
- Not reporting earnings. The handbook says you “should report earnings from any gainful (public or private) employment to PEBA annually” if under 55.
- Ignoring the February letter. The handbook says “You will receive a letter each February advising you of how much you can earn”.
- Treating an overpayment as final. The handbook says “You will have to repay any benefits you received to which you were not entitled.”
Related: South Carolina PORS retirement decisions, and public pension retirement decisions.
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Answer againSources
- South Carolina Public Employee Benefit Authority (PEBA), Fiscal year 2027 Police Officers Retirement System Member Handbook: www.peba.sc.gov
- Related official page (not quoted): IRS, Retirement topics: Disability: www.irs.gov
- Related official page (not quoted): IRS, Topic no. 410, Pensions and annuities: www.irs.gov
Read from the pension system handbooks linked above on October 22, 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.