Withdrawing Your Contributions
In lieu of a deferred allowance, you may withdraw your member contributions with interest upon your termination. However, if you withdraw your contributions, you will no longer be eligible for any benefits from the System (including any disability benefits you might have been eligible to receive due to an illness or injury that occurred while you were employed under a position covered by OCERS). You need to be aware that any contributions you withdraw from the System may be subject to state and federal income taxes, as well as to excise taxes for early withdrawal. To learn about redepositing withdrawn funds, click here and scroll down to the section titled “Redeposit of Withdrawn Funds.”
Important Tax Consequences of a Distribution
When considering any of the three distributions discussed below, OCERS strongly encourages you to seek qualified tax and/or legal advice. OCERS cannot provide you with such advice.
If you receive a lump sum distribution of your pre-tax member contribution account from the System before the minimum age for federal and state requirements, and you do not roll it over into another qualified plan or an Individual Retirement Account (IRA) you will be required to pay income taxes on the taxable portion of your lump sum distribution from OCERS. Additionally, you may have to pay excise tax penalties.
You may defer the taxes if you “roll over” the taxable portion of your lump sum distribution. The taxable portion includes member contributions that were contributed on a pre-tax basis and all accrued interest.
A check will be mailed to you, but will be made payable to another employer’s qualified retirement plan or to an IRA. Because the payment is not payable to you, no federal or state tax withholding requirements should apply to your distribution.
You may elect a combination of a partial withdrawal and a partial rollover. That is, you can withdraw a portion of your contributions (which are presently subject to federal and state income taxes and applicable excise penalties if you receive an early distribution) and direct transfer and/or roll over the remainder of the untaxed funds.
For complete details about your OCERS membership and benefit plan, consult your Summary Plan Description.