You are not required to take a refund just because you are no longer working in covered employment. But there are differences in how long you can leave your funds with the Retirement System, depending on whether or not you are vested. You are vested when you have five years of qualified service.
If you are vested, you can apply for service retirement benefits when you reach eligibility. For this reason, it may be to your advantage to leave your funds, instead of taking a refund. In most cases, the benefits our members receive as retirees greatly exceed the amount they would receive in a refund.
If you are not vested:
You can leave your funds for the next five years and continue to receive interest.
- If you do not earn or purchase service during those five years, your membership automatically terminates and your interest stops.
- At that time, you will be contacted with the information you need to request a refund.
If you are vested:
You can leave your funds indefinitely.
- Your funds accrue interest every June 30.
- You are entitled to lifetime retirement benefits when eligible.
- Options may also be available for qualified family members to receive benefits in the event of your death.
Carefully consider the pros and cons of taking a refund. When you receive a refund, you forfeit all of your service and any future monthly benefits. If you are vested, it may be to your financial advantage to leave your funds and collect retirement benefits when you become eligible.