URS members are eligible to receive a lifetime monthly benefit if they meet the eligibility requirements of the system or plan from which they are retiring. When a member requests an application to retire, our office provides a retirement packet that includes necessary forms and brochures to explain the process.
Retirement benefits don’t start automatically. Members must apply for them through our office.
The effective date of retirement for all retirement systems:
» Must be the first or the 16th day of the month following the last actual working day;
» Must be on or after the termination date;
» Cannot be changed after the retirement date has passed. If the application is submitted before their retirement date, they have until their retirement date to cancel or change your retirement application. If they submit their application between 5 calendar days before your retirement date and up to 90 calendar days after their retirement date, they may cancel or change your application up to 10 calendar days following submission. Any requests to change or cancel their retirement application must be made in writing; and
» The retirement application must be filed with our office no more than 90 days before or 90 days after the effective retirement date.
The effective date of retirement for the Utah Governors and Legislators Retirement Plan:
» Must be the first or the 16th day of the month;
» The application setting the retirement date must be filed with our office no more than 90 days before or 90 days after the effective retirement date; and
» Cannot be changed after the retirement date has passed. If the application is submitted before their retirement date, they have until their retirement date to cancel or change your retirement application. If they submit their application between 5 calendar days before your retirement date and up to 90 calendar days after their retirement date, they may cancel or change your application up to 10 calendar days following submission. Any requests to change or cancel their retirement application must be made in writing.
Your retirement benefit is paid monthly. Retirement checks for the month of payment are deposited the last working day of each month. Although your first check may be delayed up to three months following your effective retirement date, the amount of your check is retroactive to the date your retirement began. This delay is due in part to the time required to receive and post salary information from your employer and to receive verification of your termination and your service credit eligibility. Members can view their monthly deposit notice by accessing their account online through myURS at www.urs.org.
» Federal and State of Utah income taxes.
» Medical insurance if the member is insured with a participating insurance carrier.
» Payment to an alternate payee due to a divorce.
The entire monthly benefit is subject to federal taxes, unless the member has contributions that have already been taxed. The monthly benefit is also subject to State of Utah income tax unless the member is a nonresident. The member should check the state of residence tax laws regarding receipt of a Utah retirement monthly benefit. Every January, our office will send a 1099-R Form showing the gross and taxable benefits paid to the member for the previous year and the taxes withheld.
The exact PLSO amount cannot be determined until the final monthly benefit is calculated, which may take up to three months following the retirement date. The delay is due in part to the time required to receive and post salary information from the employer and to receive verification of separation and service credit eligibility. The PLSO amount is included in the first monthly retirement benefit payment, sent to you (or direct deposited to you) the last working day of the month.
How is the PLSO Taxed?
The PLSO payment is subject to:
» A 20% federal income tax withholding on the eligible portion of the distribution unless it’s paid as a direct rollover to a URS 401(k). A direct rollover of a PLSO payment does not affect the maximum deferral limits in a 401(k) plan.
» State of Utah income tax.
» Possible taxes of the state where the member resides if other than Utah.
» A 10% early withdrawal penalty if the payment is taken before age 59½ or if employment ends before the member reaches age 55.
The 10% early withdrawal penalty imposed by the IRS may not apply if the member is a qualified public safety employee if they work into or beyond the year they reach and have attained at least age 50 or 25 years of service, whichever is earlier. A qualified public safety employee provides police protection, firefighting or emergency medical services within the jurisdiction of the employing state or political subdivision.
The primary responsibility for the employer is to complete the Verification of Termination (Form RTCT-3 or RTCT-5). This form must not be completed until after the member has actually terminated. The completed form must be received by our office to ensure the correct retirement date has been set by the member and to allow the member’s retirement to be processed. In addition to required verification of the member’s separation, employers may also be asked to certify hire dates, pay rates, leave of absence dates, and payments made in addition to regular salary, etc.
Employers must certify a termination date and may also be asked to certify hire dates, pay rates, leave of absence dates, and overtime payments, etc.
The Legislature is testing a new approach to address employer concerns of an aging workforce and diminishing replacement resources with the passage of Senate Bill 19 – Phased Retirement.
The Phased Retirement bill went into effect January 1, 2017, and allows an employer to provide a phased transition into retirement when the employer deems it beneficial.
It’s a voluntary program for employers. Because it’s a test program, the Legislature included a sunset provision that will repeal the phased retirement program Jan. 1, 2025, unless the Legislature takes action to continue the program.
Under this new program, an employer and a retiring employee enter into an agreement. The retiring employee will terminate their current full-time position, but will continue working for the employer half-time while collecting 50% of their retirement benefit. The 50% benefit is set by the statute and cannot be varied by any terms of the agreement. While in the phased retirement, the retiree cannot receive any additional retirement-related contributions or benefits, cannot work for any other URS covered employer, and will not receive any cost-of-living adjustment on their retirement allowance.
Upon termination from the phased retirement employment, the retiree will begin to receive 100% of the monthly retirement allowance and the termination date will be used for calculating the separation requirements for any future post-retirement employment.
If the employer chooses to utilize the phased retirement, there are a number of employer duties the statute requires under U.C.A. § 49-11 Part 13 .
1. The employer will establish written policies and procedures for phased retirement that will include provisions for:
a. Granting and denying a request for phased retirement.
b. Needed approvals within the participating employer.
c. Time limits or other restrictions.
d. Identifying positions that may be included or excluded.
2. The employer will enter into a formal written agreement with the retiring employee. The written agreement will include these elements:
a. Specify the period of the phased retirement.
b. Optionally, address the hours of work; outline the job duties; and other arrangements related to the employment.
3. The employer will employ the retiree on a half-time basis.
4. No later than five days before the retirement date, the phased retirement application and a signed copy of the agreement between the employer and retiring employee must be submitted to the Retirement Office.
5. Once the employee enters into the phased retirement program the employer will pay the amortization rate on the employee’s wages.
6. The employer may not provide any retirement-related contributions or benefits for the retiree.
7. Except as specified for retirement-related benefits, the employer will treat the retiree working under phased retirement in the same manner as any other part-time employee working a similar position and number of hours with the employer, including:
a. Non-retirement benefits.
b. Leave benefits.
c. Medical benefits.
d. Other benefits.
1. Contact our Retirement Benefits Department at 801-366-7770 or 800-695-4877 to request a Retirement Application Packet and monthly benefit estimate at least three to four months before your anticipated retirement date.
2. Review the packet materials and the enclosed monthly benefit estimate.
3. Complete the Application for Service Retirement form and file all applicable documents with our office before your retirement date either by mail or in person. If filing in person, call for an appointment. If you visit our office, bring photo identification for yourself, your spouse, or any other adult who accompanies you.
4. Provide proof-of-age documents for yourself, and your spouse, as well as your marriage certificate (if you are married). A list of acceptable documents can be found in the Steps to Retirement brochure. You may send the original documents to our office; these will be copied and returned to you, or you may send a legible copy.
5. Complete a Notice of Post-Retirement Employment Restrictions (Form RTRT-50), the W-4P federal Periodic Tax Withholding (Form RTW4PFEDTAX), State of Utah Income Tax Withholding (Form RTTX-2), and a Direct Deposit Authorization (Form RTCT-1) for direct deposit of the monthly allowance to a bank or other financial institution.
Note: To elect the PLSO, you are required to complete an additional application. (PLSO only applies to Tier 1.)
1. Instruct members to request a Retirement Application Packet and monthly benefit estimate at least three to four months before the anticipated retirement date.
2. Complete the Verification of Termination and/or the Verification of Service and Salary form(s).