Reduction in Force
If you leave your employer before retirement, you need to decide how your retirement account may be processed based on one of three available options.
- Deferred Retirement
- Deferred with Reciprocity
- Refund of Contributions
If you are in Tiers 2, 4 or 5 and have five or more years of retirement service credit you may request deferred retirement status upon leaving your employer.
- Your retirement contributions remain in the retirement system, earning interest.
- You are eligible to retire once the minimum age and membership criteria have been met. (generally 10 years of membership, 50 years of age)
- You may withdraw your contributions and refundable interest at a later date and cancel your deferred retirement request unless you have established reciprocity (see section on reciprocity). Withdrawing your contributions, however, means that you will not be eligible to receive a monthly retirement benefit.
- If your death occurs while in deferred status, your beneficiary will receive a refund of your retirement contributions, plus interest. Monthly survivor benefits are not available.
- Your benefit does not start automatically; you must notify StanCERA when you are ready to retire.
Tier 3 members must have 10 or more years of retirement service credit to request deferred retirement status.
Deferred with Reciprocity
The second option allows employees who move between certain California Retirement systems to preserve and enhance their total retirement benefits.
If you leave your employer and accept a position in a California public agency with a reciprocal retirement system, regardless of your years of service credit, you may request deferred retirement with reciprocity status if you:
- Become a member of that reciprocal agency’s retirement system within six months of terminating employment
- Do not withdraw your retirement contributions and interest from StanCERA
Electing deferred reciprocal status is voluntary. Once made, this election cannot be cancelled and your retirement contributions cannot be withdrawn from the prior retirement system unless you terminate employment and withdraw your contributions from the new system. To maintain reciprocity you must retire from all reciprocal systems on the same date. The use of highest earnings from any reciprocal system is beneficial when determining retirement benefits.
Conversely, those of you who become StanCERA members within 6 months of leaving another California public agency with a reciprocal retirement system may also request deferred reciprocal status from the former retirement system.
Refund of Member Contributions & Refundable Interest
The third option is to withdraw your contributions and interest, if any. A refund of pre-tax contributions may be issued directly to you with the appropriate taxes withheld. Additional tax penalties may apply upon filing income tax returns. You may also roll the funds to an IRA or other eligible account, deferring tax liabilities.
Shortly after you terminate employment with your StanCERA employer, forms will be sent to you requesting your decision. If we do not receive these forms with your instructions, you are automatically set in a deferred status.
If you have less than 5 years of service, you may still leave your funds with StanCERA, but you will not be eligible for a monthly benefit.