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Guidelines for rehire of UC retirees

The University of California hiring policies should include the following rules for the reemployment of former University employees who are receiving UC Retirement Plan pension benefits. Failure to adhere to these guidelines could endanger the favorable tax status of the UC Retirement Plan, which would result in tax for all participants. Taxable income could be based on the value of a member’s entire accrued benefit in the UC Retirement Plan at the time of disqualification. The Internal Revenue Service (IRS) rules governing the UC Retirement Plan prohibit distributions unless an employee has separated from service. In judging whether or not a separation from service has occurred the IRS will look at the facts and circumstances of each case. 

Guidelines and additional information