If you are an inactive member, your contributions and the
interest that has accrued on your contributions, may be withdrawn
at any time unless you have already returned to active membership
or established reciprocity between SamCERA and another retirement
system.
Factors to Think About Before Deciding to Withdraw Your Funds
Before making your decision to withdraw, compare the amount that
you would receive as a refund to the amount of a lifetime monthly
benefit for which you may be (or may become) eligible. Also, keep
the following in mind:
-
A withdrawal will terminate your SamCERA
membership. If you make a cash withdrawal, you must
withdraw all of your funds, your service
credit will be gone, and you will no longer be eligible to
apply for any future retirement benefits, including disability
benefits, unless you return to active membership. Upon
return to active service, you will have the option of
redepositing your contributions and interest, and any interest
that would have been credited to your account since the date of
your withdrawal.
-
A withdrawal may not be the best option for
you. If you are vested, are eligible for a SamCERA
retirement benefit or disability benefit, or can establish
reciprocity with your next employer, you may want to
re-consider your options.
How Do I Withdraw My Funds?
Withdrawals from SamCERA can be received in two ways. All or
a portion of your funds that are being withdrawn can be directly
rolled over to IRA or another employer’s qualified plan or can be
paid in a check made directly out to you, or a combination of
both. The choice you make will affect the taxes that you
owe and when you must pay them.
SamCERA will withhold for California state and federal taxes on
any check written directly to you. In addition, tax penalties for
early withdrawal may apply.
Depending on your tax status, you may owe more or less in
California state and federal taxes than what was withheld by
SamCERA. You may file for a refund or pay the additional
amount, as applicable, owed to the IRS and California when you
file your incomes tax returns.
SamCERA encourages you to consult a tax advisor before deciding
how to receive your withdrawal of funds. SamCERA does not offer
tax advice.
If you elect to withdraw, carefully read and complete the
“Disposition of Retirement Contribution Form” available by
clicking here and elect either:
-
Cash Withdrawal: To have SamCERA make a
payment directly to you (minus mandatory federal withholding
tax and any applicable California state tax).
-
Rollover: You may defer taxes on the funds by
rolling all or part of them over directly to an IRA or another
employer’s qualified retirement qualified plan. (If you are
over age 72, you are not eligible to roll the funds over.)
-
Cash Withdrawal, Then Rollover: If you receive
a lump sum payment and then decide you would rather roll
over your funds, you may roll over your withdrawal within 60
days from the date of the payment by depositing your funds in
an IRA or in another employer’s qualified plan. However,
you will only be rolling over the amount that was not withheld
for federal and state taxes.
Additional Note on Cash Withdrawal: If you
withdraw and later return to active membership with SamCERA, you
may redeposit your contributions and interest to restore your
service credit.
Required Minimum Distribution
Internal Revenue Code (IRC) § 401(a)(9) requires individuals who
reach age 72 having left active service with their contributions
on deposit to begin taking a distribution from their SamCERA
retirement plan. When you reach age 72 and your contributions are
still on deposit, you can either elect to retire or to withdraw
your accumulated contributions.
