Taking Your Annuity Savings Account
How do I get a refund from PERF?
You may only get a refund, that is, withdraw the balance of your Annuity Savings Account (in the form of a refund or rollover to another qualified retirement plan) if you are no longer employed in a PERF-covered position. You cannot take money out of PERF as long as you are employed with a PERF-covered employer.
You may withdraw the amount in your Annuity Savings Account if you:
- have terminated your employment and have not been rehired into another position with a PERF participating employer in any capacity within 30 days; and,
- are not eligible for either retirement or disability benefits from PERF.
Annuity Savings Account refunds consist of:
- the 3% mandatory contributions made either by you or by your employer on your behalf;
- any voluntary contributions (if applicable); and,
- all accumulated interest and earnings credited to your account.
If you receive the money directly, rather than rolling it into another tax-deferred account, the total amount paid to you will be reduced by:
- a federal 10% penalty if you are 59 and a half or younger,
- 20% federal withholding, and, optionally, state withholding.
In order to take a refund, you must submit a Refund Application.
The refund is of the amount in your Annuity Savings Account. There are no “refund” provisions of the Defined Benefit Pension because that money belongs to your employer until you become eligible to receive a retirement benefit from PERF. If you are vested, there are significant consequences for any future pension. Please read the warning below.
Vested member’s warning
If you are vested (you have 10 years of creditable service) you will give up all claims to your future pension benefit from PERF by taking a refund of your Annuity Savings Account.
If you do not return to work in a PERF-covered position for at least 6 months before retiring, you will no longer be eligible to apply for a PERF pension benefit when you reach retirement age. If you work in covered employment for more than six months, prior PERF service will be re-credited to you and you will again be vested for a pension benefit
Even if you return to work and regain your pension benefit, taking a direct distribution refund can have significant tax penalty and potential tax deferred earnings consequences. You will also have to begin building your Annuity Savings Account from zero when you do begin to make contributions again. PERF strongly encourages members not to withdraw their Annuity Savings Account directly when they leave service, especially if they are already vested.
There are a variety of payment options when withdrawing your Annuity Savings Account.
Separation from employment
Federal law prohibits PERF from making distributions from the Fund, including the Annuity Savings Account, prior to a member’s separation from employment. PERF cannot make a distribution of the Annuity Savings Account until the member has been separated from employment for 30 days.
You should not apply for a refund if you intend to move from one position to another within a participating employer. A true separation from service only occurs if you leave PERF-covered employment and do not return to employment with ANY participating employer within 30 days from your date of termination. If you continue uninterrupted employment in any capacity (full time or part time) in any agency or department of your current employer – regardless of whether your new position is a covered position or not – you will not be considered separated from employment.
| NOTICE - DORMANT ACCOUNTS |
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| If you have less than 10 years of service, separate from employment, and leave your Annuity Savings Account with PERF, state law mandates that your account only be credited with interest for a period of 10 years. Once 10 years passes, your account will no longer accrue interest. |
