Withdrawal of Contributions
Once contributions are withdrawn, your retirement system membership terminates, which results in the loss of your eligibility to apply for a service, disability, deferred, or reciprocal retirement. Therefore, you should give careful consideration to all of the options available before making an election to withdraw your retirement contributions.
Refundable contributions include the amount you paid into the retirement system, any employer-paid portion of employee contributions, and the interest credited to those amounts.
VCERA is required to withhold 20% of the taxable portion of any distribution for federal tax purposes. The taxable portion will consist of any pre-tax contributions you made to the Plan, the employer-paid employee contributions, and interest that has been credited to your member funds on deposit. The 20% withholding will not apply if you roll over the taxable portion of the VCERA distribution to an IRA or qualified employer retirement plan willing to accept a rollover.
For more information on taxation of withdrawals, visit the VCERA website for a copy of the “Special Tax Notice Regarding Plan Payments and Federal Income Tax”.
You should not withdraw your contributions without carefully reviewing the information contained in the Disposition of Separated Members’ Retirement Contributions form and the Special Tax Notice Regarding Plan Payments and Federal Income Tax form, which must be signed by you (and your spouse if applicable) and returned to VCERA before a refund of contributions will be issued.
If you do not make a written election at the time of your separation from service with a VCERA participating employer, you will be placed automatically in a deferred retirement status, and your individual funds will be left on deposit with VCERA. You may withdraw funds left on deposit at any time by requesting and completing a Disposition form.
NOTE: The foregoing is not intended to be tax advice; please consult a tax professional or the IRS for more information prior to requesting a withdrawal of your retirement plan contributions.