Withdrawal of Retirement Contributions - Department of Retirement

DRS Withdrawal of Retirement Contributions As a member of one of the following Washington State retirement systems, you are entitled to withdraw or transfer your employee contributions plus interest if you leave employment. These systems are characterized by the Internal Revenue Service (IRS) as 401(a) defined benefit plans: • Public Employees’ Retirement System (PERS) Plan 1 and 2 • Teachers’ Retirement System (TRS) Plan 1 and 2 • School Employees’ Retirement System (SERS) Plan 2 • Law Enforcement Officers’ and Fire Fighters’ Retirement System (LEOFF) Plan 1 and 2 • Public Safety Employees’ Retirement System (PSERS) Plan 2 • Washington State Patrol Retirement System (WSPRS) Plan 1 and 2 This publication is not intended for PERS Plan 3, TRS Plan

3 or SERS Plan 3 members. For information about withdrawing contributions from these plans, you may call ICMA-RC at 888-711-8773 and request a copy of the Plan 3 Request for Payment of Defined Contribution Funds packet. You may also get a copy on the ICMA-RC website at www.icmarc.org/plan3. When can I withdraw or roll over my Systems (DRS) will continue to pay interest until you contributions? either withdraw the funds or retire from the system. Regardless of a member’s employment status, DRS You can withdraw or roll over your employee pays 5.5 percent annual interest (this is the current contributions plus interest only if you are separated rate as of the printing of this packet) compounded from system-covered employment. quarterly on employee contributions that remain in the You can withdraw only the employee contributions plus retirement fund. There is no guarantee that this rate will interest. Employer and state contributions remain in not change. If you return to a job covered by a DRS- the trust fund and are not refundable to the member. If administered system and you left your contributions you choose to withdraw or roll over your employee intact, your previous service credit will be combined contributions plus interest, you cancel all rights with your new service credit to qualify for retirement. in your system and lose the service credit you have Option 2: Withdraw your money earned toward a retirement benefit. You are entitled to withdraw your employee If I leave my job, what can I do with my contributions plus interest any time you leave contributions? employment covered by the DRS- administered systems. If you Option 1: Leave your contributions in the plan withdraw your money, IRS rules You are not required to withdraw your contributions require a withholding tax of 20 when you leave. The Department of Retirement percent of all tax-deferred funds. WASHINGTON STATE DEPARTMENT OF RETIREMENT SYSTEMS DRS If you are under age 59½, the IRS may levy an LEOFF Plan 1 additional 10 percent tax for early withdrawal on the There are no requirements to repay a withdrawal if you tax-deferred portion of the withdrawal. A withdrawal is become re-employed. treated like earnings for the year in which you receive payment. DRS will mail you a Form 1099-R for your WSPRS Plan 1 and 2 tax filing purposes. See pages 3-6 for more information You may not withdraw while on disability...

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