diff --git a/src/statement.c b/src/statement.c
index 60949f3746e0..ba316ef6b6d6 100644
--- a/src/statement.c
+++ b/src/statement.c
@@ -3882,7 +3882,7 @@ Statement *ReturnStatement::semantic(Scope *sc)
             }
             else
             {
-                if (tf->isref)
+                if (tf->isref && (fd->storage_class & STCauto))
                 {   /* Determine "refness" of function return:
                      * if it's an lvalue, return by ref, else return by value
                      */
@@ -3895,11 +3895,11 @@ Statement *ReturnStatement::semantic(Scope *sc)
                         unsigned errors = global.startGagging();
                         exp->checkEscapeRef();
                         if (global.endGagging(errors))
-                        {   tf->isref = FALSE;  // return by value
-                        }
+                            tf->isref = FALSE;  // return by value
                     }
                     else
                         tf->isref = FALSE;      // return by value
+                    fd->storage_class &= ~STCauto;
                 }
                 tf->next = exp->type;
                 //fd->type = tf->semantic(loc, sc);     // Removed with 6902
diff --git a/test/runnable/declaration.d b/test/runnable/declaration.d
index 2c7b5275980a..58c111609b79 100644
--- a/test/runnable/declaration.d
+++ b/test/runnable/declaration.d
@@ -20,6 +20,34 @@ void test6475()
     static assert(is(X2 == int));
 }
 
+/***************************************************/
+// 6905
+
+void test6905()
+{
+    auto foo1() { static int n; return n; }
+    auto foo2() {        int n; return n; }
+    auto foo3() {               return 1; }
+    static assert(typeof(&foo1).stringof == "int delegate()");
+    static assert(typeof(&foo2).stringof == "int delegate()");
+    static assert(typeof(&foo3).stringof == "int delegate()");
+
+    ref bar1() { static int n; return n; }
+  static assert(!__traits(compiles, {
+    ref bar2() {        int n; return n; }
+  }));
+  static assert(!__traits(compiles, {
+    ref bar3() {               return 1; }
+  }));
+
+    auto ref baz1() { static int n; return n; }
+    auto ref baz2() {        int n; return n; }
+    auto ref baz3() {               return 1; }
+    static assert(typeof(&baz1).stringof == "int delegate() ref");
+    static assert(typeof(&baz2).stringof == "int delegate()");
+    static assert(typeof(&baz3).stringof == "int delegate()");
+}
+
 /***************************************************/
 // 7019
 
@@ -169,6 +197,7 @@ void test8942()
 int main()
 {
     test6475();
+    test6905();
     test7019();
     test7239();
     test8123();