More on Reciprocity
Benefits of establishing reciprocity
There are several benefits to establishing reciprocity if joining ACERA from a reciprocal agency (or leaving ACERA for another reciprocal public employer):
- If you are in tier 1, 2, or 3, your employee contribution rate with ACERA is determined using your age of entry in the previous system (if applicable). Since contribution rates are based on a member’s age, this results in a lower employee contribution rate requirement, because you were younger when you joined the previous system;
- Service credit earned in a reciprocal agency is combined with your ACERA service when establishing your vesting rights and eligibility to retire. This means you do not need to “start over” when moving to a reciprocal public employer; and
- The highest compensation attained under any reciprocal agency is used by all reciprocal systems to calculate your final average salary and determine your retirement benefit.
Qualifications for reciprocity
To qualify for reciprocity, you must do all of the following:
- Elect to leave your contributions on deposit and defer retirement with your previous employer’s retirement system.
- Begin membership in the next system within six months after termination of covered employment in the first system. (Remember that your ACERA membership doesn’t begin until the 1st day of your 2nd biweekly pay period, so it typically does not start on your date of hire.)
- Avoid any overlapping service as this may disqualify your eligibility.
- Retire from each reciprocal retirement system on the same day.
When you complete your ACERA member Enrollment Questionnaire as a new member, you will be asked about your previous experience with public agencies. If you answer that you have left funds on deposit with your previous employer(s), ACERA will send you an election letter explaining the benefits and requirements of establishing a reciprocal agreement with your previous employer’s retirement plan. If you meet the eligibility requirements, you may elect to establish reciprocity by indicating so on the letter and returning it to ACERA. ACERA will mail the letter to you within 30 days of receipt of your ACERA member Enrollment Questionnaire.
Once you establish reciprocity, your election is irrevocable. Thereafter, you cannot withdraw contributions from the previous retirement system unless you terminate ACERA membership with the second system and withdraw your ACERA contributions. In addition, when you get ready to retire, you must file separate retirement applications with each reciprocal system and retire from each system on the same day. You will receive a separate retirement check from each system based on the service earned in that system.
Reciprocity for certain safety members (Law enforcement or fire fighting only)
If you were a safety member (law enforcement and fire fighting only) in a reciprocal agency and you withdrew funds upon termination, you may redeposit funds for either partial or full reciprocal benefits.
Full reciprocity applies if the time lapse between system memberships is six months or less. If you redeposit the prior membership, that system will use the highest compensation earned in either system to compute your benefit calculation. The current system may adjust your contribution level to be based on the age of entry in the previous system if required.
Partial reciprocity applies if the time lapse between system memberships is more than six months. The system in which you redeposited membership will pay an allowance based on final compensation earned in that system. The current system will not make an adjustment to your age of entry.
Reciprocity and disability retirement
If you apply for and are granted a disability retirement and you have a reciprocal agreement with one or more retirement systems, the total amount from all systems cannot equal more than what one system alone would have paid if all service had been earned in that system. Therefore, the disability benefit is generally pro-rated based on service. However, benefit amounts may be adjusted further depending on how much each system is paying.