A bill to remove the teacher retiree earning cap is back and advancing fast. It passed the Senate last week and is now headed to the House floor. If the bill—HB 2288—passes the House floor, it will advance to the governor for final signature.
It’s a trade-off. A six-month wait is longer than many would prefer, but it is required to eliminate the 36-month earnings cap.
Under current law, OTRS retirees must wait 60 days before returning to work in a public school, and once they do, they are subject to a 36-month earnings cap. HB 2288 aims to change that.
The original version of the bill, filed last year, eliminated the 36-month earning cap for all retired teachers returning to the classroom after the 60-day waiting period. That is, HB 2288 would allow retired teachers to return to full-time teaching while drawing both a full salary and full retirement benefits after a 60-day waiting period.
Unfortunately, according to OTRS’s actuarial analysis, the original 60-day waiting period was simply too short and would result in an unfunded actuarial accrued liability (UAAL) of $488 million to the fund, potentially leading to severe instability. To mitigate this unfunded liability, the waiting period was extended to 6 months. According to OTRS, this change was required to protect the fund and allow the elimination of the earnings cap.
In the end, it’s a trade-off. A six-month wait is longer than many would prefer, but it is required to eliminate the 36-month earnings cap.