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PERS counsel: 30‑day teacher break‑in‑service risks tax penalties; board approves initial adoption of return‑to‑work rule
Summary
The PERS administrative committee gave initial adoption to Regulation 34, which aligns new return‑to‑work options with recent legislation but shortens the break‑in‑service from 90 to 30 days; counsel warned the IRS could treat some reemployment as early distributions without a bona‑fide separation.
The Public Employees Retirement System of Mississippi's administrative committee voted to give initial adoption to Regulation 34, a set of return‑to‑work rules that implements recent legislative changes including a reduced break‑in‑service and a new option allowing retirees to return to work at up to 80% of the position's pay.
Legal counsel Rob Goss of the law firm Ice Miller told the board that federal tax rules require a bona‑fide break in service before a retiree can be treated as retired for tax purposes. "If a retiree who's under age 59.5 begins commences their retirement without having a bona fide break in service, then that retiree…
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