If you are no longer working* in a public position you may be eligible for a refund of your accumulated deductions.
* “No longer working” is absolute. Even if the position is paid but not enough hours for membership, you cannot take a refund until you absolutely are not working in a government position.
If you have been officially investigated for or charged with misappropriation of funds from your employer or convicted of any crime related to your office or position you are subject to the restrictions and provisions of MGL 32 §15 which does include prevention of refund until full restitution is made.
At the time of your application for a refund, your records will be reviewed and if you are vested and eligible for a retirement benefit you will be advised as such before you give the final go-ahead to process your refund application.
Interest will be included in the refund along with your paid-in funds.
- If you voluntarily left your position and you have less than 10 years of service on record then you will receive 3% interest.
- If you have greater than 10 years service you will receive “regular interest” which has been .1% (one tenth a percent) since 2012. ( This is basically what a bank savings account pays.)
- If you were involuntarily terminated from your position you will receive “regular interest”.
The typical refund process is as follows:
- The member must complete a refund application with signature witnessed by a Notary Public, and forward it to his/her employer. Click here to find a Notary Public.
- The employer will certify the termination of employment and submit the application to the retirement office.
- The refund application is processed within 60 days and presented to the Retirement Board for approval. It may be delayed further if you recently ended employment and your employer has yet to forward the last of your deductions to this office.
- Once approved, the refunds are issued following the monthly meetings of the Retirement Board.
Types of Refunds:
When requesting a refund you may choose a direct refund, a rollover into another qualified plan or have a percentage paid to you and the balance rolled into a qualified plan.
There will be 20% deducted immediately for Federal taxes on any direct refunds and possibly another 10% at the end of the year for early withdrawal.
There are no tax penalties for rollovers.
Each person’s tax situation is different, and for that reason we do not give out tax advice – we leave that to your chosen tax professional. In regards to Internal Revenue Service (“IRS”) code, we are defined as a State or political subdivision retirement plan under chapter 401(a), which can be further qualified under 414(h)(2) – ” . . . contributions not included in gross income reported for federal income tax purposes . . . “. e.g. pre-tax contributions. In some circumstances a portion of your contributions will not be “pre-tax”, when that is the case, the IRS form 1099r you receive from us will indicate the amount that is not “pre-tax”.
Click here for the refund application and additional information regarding taxes and the options for receiving refunds.
Please call the retirement office if you have any questions or would like us to mail you a refund application.