Leaving employment prior to retirement does not mean that your rights to earned retirement benefits are lost, and you don't have to withdraw your MCERA account just because you're leaving your job. In fact, there are good reasons to leave your contributions on deposit: your account continues to grow at 7% compound interest, and upon reaching retirement eligibility you can receive a lifetime monthly benefit.
Your Options after Leaving Your Employer
If you leave your job before retirement you have several options available to you.
Defer Your Retirement
When you leave employment prior to retiring your membership type changes from "active" to "deferred." There are two categories of deferred members:
- Deferred Vested Membership. If you leave employment after earning five or more years of service credit, including reciprocal service, you're vested. You may leave your contributions on deposit and defer your retirement until you have met the minimum eligibility requirements.
- Deferred Non-vested Membership. If you leave employment with less than five years of service credit, including reciprocal service, you're not vested but you can still leave your contributions on deposit and withdraw them at any time. Deferred non-vested members are eligible to receive a service retirement benefit upon reaching age 70.
If you leave your job and become a member of a reciprocal retirement system in California within 180 days of your termination, whether or not you are vested, you may be eligible to establish reciprocity. To establish reciprocity you must leave your contributions and interest on deposit with MCERA. Upon establishing reciprocity you must leave your contributions on deposit while you are still a member of your reciprocal retirement systems.
Withdraw Your Contributions
You can choose to have your member contributions and interest refunded through a lump sum payment made directly to you, a direct rollover from your MCERA account to another qualified plan, or a combination of lump sum payment and rollover. Please keep in mind that by electing to withdraw your contributions you forfeit any rights to retirement benefits you have already earned.
Selecting Your Option
Within a few weeks of your termination date, MCERA will send you a Terminating Employment Handbook and an Account Distribution Election Form, on which you will decide what you'd like to do with your retirement contributions. If you do not send MCERA your election, your funds will remain on deposit until you provide direction.
Reemployment with an MCERA Employer
If You Are a Deferred Member
If you leave your contributions on deposit with MCERA after you leave employment and are subsequently rehired, you will maintain your original membership entry date and return to your prior retirement tier.
Classic Members: If your break in service between your termination date and reemployment is less than 180 days, when you return to active membership you will pay retirement contributions based on your original entry age. If your break in service is longer than 180 days, you will pay contributions based on your age at re-entry into membership.
If You Withdrew Your Contributions
If you choose to withdraw your contributions and are subsequently rehired with an MCERA employer, you may restore your previously earned service credit in your original retirement tier by redepositing the full amount of contributions withdrawn, plus the interest your account would have earned had you left your contributions on deposit. If you choose to not redeposit your previously withdrawn contributions you will be placed in your employer's currently available retirement tier and will begin a new period of membership with a new membership entry date.
Please read about Purchasing Service Credit for more information on redepositing withdrawn contributions.