Options for Members who Separate from Employment
Members who separate from all URS covered employment may request a refund of contributions paid to a contributory defined benefit retirement system, by the employee or contributions paid on behalf of the employee, pursuant to Internal Revenue Code Section 414(h) (“Member Contributions”). Or, they may leave the funds in the system until they qualify for a service retirement. It’s not mandatory to take a refund. Members may leave funds with URS until age 70½ and retain membership.
Members who elect to leave their funds with URS retain service credit that can be added to any eligible service credit earned if they are later employed in a URS covered position. Members with four or more years of verified service credit are considered vested and eligible for a monthly retirement benefit when corresponding age and service requirements are met.
If separated members elect to take a refund, the service credit associated with the refunded period of coverage under a Contributory Retirement System is forfeited. A refund from the URS Defined Benefit Plan includes all member contributions and interest (if applicable) in the member's account. URS does not pay partial refunds.
Contributions made by the employer to a Noncontributory Retirement System are nonrefundable. These contributions represent service credit, and are not credited to the member's account, and are not reflected in the member's defined benefit annual retirement statement.
Members who return to work in an eligible position for a covered employer may reinstate a previous refund if it represents eligible service. Reinstating a refund increases a member's monthly benefit at retirement and may provide an increased death benefit.
Members must terminate employment from all URS participating employers in order to receive a refund of their retirement account. Members are not eligible for a refund under any of the following conditions:
1. Transferring from one participating URS employer to another.
2. Terminating employment with one participating employer and being subsequently rehired by the same or a different participating employer, even though there may be a break in service.
3. Terminating employment, applying for a refund, and subsequently accepting employment with another URS participating employer before the disbursement of the retirement refund.
4. Exempting from retirement coverage in Tier 1. Refer to the section marked Membership – Exempting from Retirement Coverage for more information about who may exempt.
Exempt employees may request a direct rollover of member contributions, if applicable, to a qualified defined contribution plan.
5. Becoming ineligible for service credit. This includes:
a. Employees whose hours drop below an average of 20 per week,
b. Employees who no longer receive their employers’ normal benefits, and
c. Teachers whose hours drop below teaching half time.
Ineligible employees may request a direct rollover of member contributions, if applicable, to a qualified defined contribution plan.
6. Applying for or receiving long-term disability benefits through an employer that has a benefit protection contract with the Utah State Retirement Board.
7. Taking a leave of absence from any position covered by URS.
Refunds cannot be processed until after 60 days from the last date of the pay period for which contributions were paid. If a refund includes member contributions paid on employment rendered before January 1, 1989, the additional 3% retirement allowance granted pursuant to law may be forfeited.
Members may elect to either have the refund paid to them directly or paid as a direct rollover to a 401(k) or other qualified plan, or to an eligible plan such as a 403(b), 457(b), or traditional IRA. The taxes members owe are impacted by this decision. Refer to the Refund of Member Contributions brochure for important tax information.
Because tax rules that apply to refunds are complex, its recommended members consult a professional tax advisor before completing a refund application. An Application for Refund of Member Contributions must be completed by members and their most recent participating employer.
Members who qualify for a monthly retirement benefit, and who elect to forfeit their rights to their monthly retirement benefit by withdrawing their member contributions, are required to sign a Lifetime Monthly Retirement Benefit Waiver in order to process the refund.
For withdrawals from the URS Savings Plans (401(k), 457(b), IRAs), contact our Savings Plans Department at 801-366-7720 or 800-688-401k.
1. To apply for a refund of your member contributions, you must terminate employment from all URS participating employers.
2. Contact our Retirement Benefits Department at 801-366-7770 or 800-695-4877 for an Application for Refund of Member Contributions form. Employers don’t stock this form.
3. Read the Refund of Member Contributions brochure and the Special Tax Notice Regarding Plan Payments brochure before completing the application.
4. Have the Application for Refund of Member Contributions form notarized.
5. Complete, sign, and return the Lifetime Monthly Retirement Benefit Waiver form to our office if it was included with the Application for Refund of Member Contributions.
6. Complete, sign, and return the Direct Rollover Certification form provided by our office if you are transferring your account balance from URS to another qualified plan.
7. Complete, sign, and return the After-Tax Contributions Rollover Certification form if you are rolling over after-tax contributions.
1. Instruct your employees to request an Application for Refund of Member Contributions form from our Retirement Benefits Department at 801-366-7770 or 800-695-4877. You cannot stock this form.
2. Enter separation information through the URS website.
3. If you need assistance with completing the application, call 801-366-7770 or 800-695-4877.