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Leaving Covered Employment

Whether you are leaving your PSRS/PEERS-covered work temporarily or permanently, you have options for the funds you have contributed while working. You can learn more about refunds by visiting the Refunds section of this website.

  • If You are Vested

    Once you have earned five years of eligible service, you are vested and can receive lifetime retirement benefits when you reach retirement eligibility.

    • If you are vested and leave covered employment, you can leave your funds with PSRS/PEERS and continue to earn interest on them until you are eligible to retire.
    • If you take a refund, you are no longer eligible for those lifetime retirement benefits.

    If you are vested, it may be to your financial advantage to leave your funds with PSRS/PEERS and apply for lifetime retirement benefits when eligible. Most members receive considerably more by taking monthly benefits than by taking a refund.

  • If You are not Not Vested

    If you leave PSRS/PEERS-covered employment before you are vested (with fewer than five years of eligible service) you can leave your contributions in your PSRS/PEERS membership.

    If you do:

    • You retain your membership.
    • Your funds continue to accrue interest for five years after you end covered employment.
    • If you do not return to covered employment or purchase service to attain vested status within five school years, your membership terminates. We will let you know when this happens, and you can take a refund at that time. 

    If you are not vested and not currently working in PSRS/PEERS-covered employment, but think you may return, it may be to your advantage to leave your funds with PSRS/PEERS and earn interest on them. When you return, your membership and service will simply pick up where you left off. If you don’t return, you can take a refund at any time.

    In the event that you return to covered employment after taking a refund, you can buy back, or reinstate, all or any part of the service you forfeited.

  • Refund Considerations

    Before making the decision to take a refund, carefully consider the advantages of retaining your membership, instead. We encourage you to contact our office to discuss any questions or concerns you may have.

    • Regardless of your choice, your contributions and the interest earned on them, will always be returned to you.
    • When you take a refund, your membership is canceled and you forfeit any future benefits to which you may have been entitled.

    You may owe income taxes on your refund.