The legislation sponsored by state Sen. John Sullivan passed the Senate by a 51-0 vote Wednesday.
The bill would allow retired teachers who are still certified to teach while still maintaining their eligibility for retirement. Retirees would be exempt from making contributions or receiving any new pension benefits.
Schools must have advertised the position for three months prior to the beginning of the school term and offer vacancies to teachers' whose positions have been eliminated by the district.
The legislation now moves to the House.