Leaving Employment

Upon termination of employment with a FCERA Plan Sponsor, we will send you a Disposition of Retirement Contribution Form and Instructions.

*Please note that the term termination is used to refer to any separation of employment, not to refer to why or how the employee separated.

The options available to you are:

  1. Leave your contributions on deposit
    1. Deferred Retirement
      1. If you are vested (you have at least 5 years of service credit): you can defer your retirement to any time after eligibility. (Click here for retirement eligibility requirements by tier) At any point, after age eligibility, you can elect to begin receiving your lifetime monthly benefit.
      2. If you are not vested (you have less than 5 years of service credit): you can still defer your retirement, but you will not be eligible for a benefit unless you return to work for any FCERA Plan Sponsor at some point in the future and earn more service credit to become vested, or are eligible to retire through reciprocal service (see below).
        1. You can also leave the funds on deposit for now, and elect to refund later, as long as you did not establish reciprocity (and your balance will continue to accrue interest).
    2. Reciprocity – If, within 6 months after termination, you establish membership at another eligible California Public Agency Retirement System, you can elect to establish reciprocity. Reciprocity protects the value of your pension and can be very beneficial to you in retirement. Click here for more information on the benefits of reciprocity.
      1. Examples of agencies with which we can establish reciprocity: CalPERS, CalSTRS, any county in California, City of Fresno, and many more.
        1. If you are going to work for a California Public Agency and you are not sure if reciprocity is available, contact us and we can look into it for you.
  2.  Withdrawal
    1. Direct Refund – Upon termination, you are always eligible to take the contributions you have paid into the plan along with any associated interest. Please read the above Disposition form and Instructions carefully so that you understand that you will be subject to a mandatory 20% federal withholding of taxes by the IRS, and additional California taxes.  You will also be subject to early withdrawal penalties (unless you roll it into a qualified retirement plan within 60 days after distribution).
      1. Please consult a tax adviser, accountant, or financial planner for any questions regarding tax consequences
    2. Direct Rollover – You may roll over your contributions and associated interest to a qualified retirement plan (ex: IRA or employer based plan like 401K, 403b or 457b). Choosing the Direct Rollover avoids any taxes and early withdrawal penalties that a member would incur withthe Direct Refund Option.
      1. You can also do a combination of option 2A and 2B

If you ever come back to work for a FCERA Plan Sponsor in a pension eligible position, you will accrue service credit (although it may be in a different tier).  If you elect a refund, but later come back to work for a FCERA Plan Sponsor, you will have the option to redeposit those withdrawn funds (plus the interest that the funds would have earned had it remained in the system) in order to reestablish that service credit and earlier membership.

Benefits of Deferral for Vested Members

If you are a vested member (you have more than 5 years of service credit) there is a significant benefit to deferring your retirement until a time after you reach eligibility for retirement.  Your pension benefit through FCERA is a lifetime monthly benefit, so even if you will only be eligible for a small benefit, there is an advantage to knowing that you can rely on that amount every month for the rest of your life.  Here is a simple calculation to compare a lump sum refund to a lifetime benefit:

Let’s say a member has a contribution balance of $36,000 and would be eligible for a lifetime benefit of $1,000 per month beginning at age 50.

First, divide $36,000 by $1,000 to get 36.  This is the number of months that the member would need to receive a benefit to reach a “break even” point between the lifetime benefit and the lump sum withdrawal.

Next, divide 36 by 12 to get 3 years.  Every month that this member receives a lifetime monthly benefit payment of $1000 after the age of 53 puts the member ahead of that $36,000 lump sum withdrawal amount.

The above example does not take into consideration any tax consequence(s) or effect of a withdrawal of contributions.


Please review this Disposition of Retirement Contributions form and Instruction sheet, which may help you answer additional questions.

When we receive notice of an employee’s termination, we will mail you a copy of the above form and instructions.  You may also fill it out and submit it in advance.

All refund and rollover options must be processed to ensure that there are no outstanding issues with an employees file.  Please allow for 90-120 days for your refund or rollover to be processed.

Please contact us with any questions about your options when you leave employment.