If you terminate your employment with an ERB-covered entity prior to retirement, you are entitled to request a withdrawal of your member contributions from your ERB account. If you opt to withdraw your member contributions, you must withdraw the entire amount.
The Request for Refund and/or Rollover form is available on the ERB website. If you are requesting your funds within 90 days of termination, your employer must certify that you are no longer working. Employer contributions based on your earnings are not refundable.
Members who choose to withdraw their contributions from the retirement plan receive a lump-sum payment plus interest. The interest rate is based on the five-year Treasury bill as of March 31 of each year. For the current fiscal year the rate is 2.24%. The ERB does not pay interest on pre-1983 contributions because contributions prior to 1983 have already been taxed. Refunded ERB contributions may be directly rolled over into an IRA or other qualified plan without penalty. If the distribution is not transferred directly into another qualified retirement plan, it is subject to federal income tax and a 10% penalty for early withdrawal. The ERB is required by statute to withhold 20% of the total distribution, including interest, and forward it to the IRS as a withholding. You should consult with your tax advisor before taking a refund or transferring it to another qualified retirement plan. The ERB cannot offer tax advice and is not liable for the tax effects of a refund or rollover.
If a member dies prior to retirement, contributions are refunded to his or her beneficiary with interest. If a retired member who opted not to elect survivor benefits (i.e., Option A “Straight Life” Benefit) dies before his or her contributions have been paid out, the beneficiary will receive a refund for the remainder of his or her contributions at the interest rate established by the ERB. If your beneficiary is under the age of 18, payment will not be made until the minor has reached age 18 or until the court appoints a guardian of the minor’s estate.
If you have taken a refund but wish to reinstate credit for your contributions to the Defined Benefit Plan, you may pay the Educational Retirement Board the withdrawn amount plus interest for the period during which the funds were withdrawn. Check the ERB website for the current interest rate. If you received a refund of your contributions and have no service credit as of July 1, 2010, and decide you want to reinstate credit for your contributions to the Defined Benefit Plan, you will be subject to the new retirement eligibility rules. You may not take a refund after the effective date of your retirement.
