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Retirement System Defined

Excerpted from "Social Security Handbook". See the up-to-date, official Social Security Handbook at

1005. Retirement System Defined

1005.1 What is a "retirement system"?

A retirement system is any pension, annuity, retirement or similar fund or system maintained by a State or local government or instrumentality. The purpose of the system is to provide retirement benefits to participating employees. The Internal Revenue Service has the responsibility for determining whether a retirement system not covered by a Section 218 Agreement (see §1000.2) qualifies to be exempt from mandatory Social Security and Medicare coverage. (See §1000.5.)

1005.2 Who determines if a worker is a member of a retirement system?

The State determines if you are a member of a retirement system under State law. Generally, you are considered a member of a retirement system if you can qualify for benefits under that system based on your present job.

Last Revised: Oct. 11, 2005

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