4. Withdrawing Your Retirement Contributions and Ending ACERA Membership

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When you terminate employment, one of your 4 options regarding retirement is to withdraw the employee retirement contributions you’ve paid into ACERA with each paycheck during your career as an ACERA member. To withdraw your contributions, use an ACERA . Follow these instructions when completing the form:

Termination/Election of Membership Form Instructions

If you wish to defer ACERA membership…

  • Elect to defer your membership in Section A.

  • Return your form to ACERA within 90 days of your termination date.

If you wish to establish reciprocity with another retirement system…

  • Elect to defer your membership in Section A.

  • Elect to establish reciprocity in Section B, and note the name of your new employer’s retirement system.

  • Return your form to ACERA within 30 days of your termination date.

  • (Note: Overlapping service in two agencies may disqualify you for reciprocity.)

If you wish to end ACERA membership and withdraw your contributions…

  • Elect to withdraw your contributions in Section C.

  • Be sure to sign the Waiver of Rights on the form, indicating you agree to waive all rights to future retirement benefits and that you understand the tax-withholding implications of your refund.

  • Complete Part III of the form—in most cases, your spouse must acknowledge your election.

  • Decide how you wish your contribution refund to be paid (payment options are noted below).

  • Return your form to ACERA.

If you elect to end your ACERA membership and withdraw your contributions, the following payment options are available:

  • Your refund may be paid directly to you in a lump sum. When you choose a lump sum, ACERA is required to withhold federal income tax at the rate of 20% from the taxable portion of all lump sum distribution. ACERA is also required to withhold California state income tax at the rate of 2% from the taxable portion of your distribution unless you elect otherwise. Additionally, if you’re under 59 1/2, both the Federal and State governments may assess penalties for “early withdrawal from a retirement account.” The taxes and penalties may add up to as much as 33%. ACERA cannot pay your refund sooner than 30 days from the date of termination. Expect 30 to 60 days for funds to be disbursed.
  • Your refund may be paid through a direct rollover to another eligible retirement account. When you choose a direct rollover, your account balance may be disbursed as follows:
    • Pre-tax contributions and interest may be rolled over into an eligible retirement account, such as an IRA or another employer’s eligible retirement plan.
    • After-tax contributions may be rolled over into a Roth IRA. You may choose the amounts to be rolled over into each account;

If you choose a direct rollover, payment will be made directly to your IRA, to another employer plan that accepts rollovers, or to another eligible plan.

You may choose to have certain amounts of pre-tax or after-tax funds paid directly to you. Keep in mind that pre-tax disbursements will be subject to tax withholding.