The State determines whether a member who has a break in service after coverage was
extended to the retirement system coverage group is considered a new member upon return
to employment. The State’s decision depends upon the provisions of the particular
retirement system involved and on State law. If the State considers an individual
to be a new member of the retirement system upon return to employment, the employee
is compulsorily covered. If the State considers an individual to have retained membership
in the retirement system during a break in service, the employee is not considered
a new member upon return to employment and retains his or her "no" vote—provided the
entire retirement system to which the employee belongs was covered as a single retirement
system coverage group. If the retirement system was divided into deemed systems, an
individual who returns to work for the same deemed system after a break in service
retains his or her "no" vote if the employee is not considered a new member of the
deemed system under State law. This is a change of position effective July 15, 1976.
However, an individual who returns to work for a different deemed system is covered
compulsorily as a new member even though the employee previously voted against coverage.
The State's decision on whether an individual is considered a new member under State
law must be applied consistently to all similarly situated individuals.
Example 1: A referendum was held among all the eligible members of the Municipal Employees
Retirement System (MERS), a statewide system covering all municipal employees. A was
an employee of City X and voted against Social Security coverage. After the coverage
was extended to the retirement system coverage group, A terminated his employment
with City X and entered private employment. Under the rules of MERS, A retained his
membership in MERS. Two years later, City X reemployed A. The State holds that he
is not a new member of MERS. A is not a new member for purposes of coverage. He retains
his initial choice of "No" coverage.
Example 2: A referendum was held among all the eligible members of MERS, a statewide system
covering all municipal employees. A was an employee of City X and voted against coverage.
After coverage was extended to the retirement system coverage group, A terminated
his employment with City X and entered private employment. A withdrew his contributions
from the retirement system. Two years later, City X reemployed A. The State holds
that he is a new member of MERS. A is a new member for purposes of coverage and is
covered compulsorily.
Example 3: MERS is a statewide system that covers all municipal employees. For coverage purposes,
the State deemed a separate retirement system to exist with respect to each political
subdivision participating in the retirement system. Cities X, Y, and Z held referendums
and coverage was provided for the retirement system coverage groups. A was an employee
of City X and voted against coverage. After coverage was extended, he terminated his
employment with City X and entered private employment. He retained his membership
in MERS. Two years later, City X reemployed A. The State holds that he is not a new
member of the deemed retirement system. A is not a new member for purposes of coverage
and retains his "no" vote. If, however, he was a new member of the deemed system,
he would have been covered compulsorily even though he had previously voted against
coverage.
Example 4: MERS is a statewide system that covers all municipal employees. For coverage purposes,
the State deemed a separate retirement system to exist with respect to each political
subdivision participating in the retirement system. Cities X, Y, and Z held referendums
and coverage was provided for the retirement system coverage groups. A was an employee
of City X and voted against coverage. After coverage was extended, he terminated his
employment with City X and entered private employment. He retained his membership
in MERS. Two years later, City Y hired A. He is covered compulsorily as a new member,
since he did not return to work as a member of the same deemed retirement system in
which he had voted against coverage.