Leaving SCERS-Covered Employment

If you leave your job before retiring, your SCERS membership doesn’t end immediately. You’ll have choices to make about what to do with your contributions—and your future benefit, if you’re vested.

This section explains what happens when you leave employment and what your options are as a SCERS member. 

Your Options When You Leave

Once your employer notifies SCERS of your separation, you’ll receive information explaining your choices:

Option 1: Withdraw Your Contributions

  • Receive a refund of your personal contributions, plus any credited interest
  • Forfeit all service credit and any future SCERS benefit
  • Subject to federal and state tax withholding unless rolled over into another qualified retirement plan

It is important to note you must be separated from all SCERS Participating Employers for at least 60 days before withdrawing your contributions. You cannot return to SCERS-covered employment and keep the refund. You would have to redeposit the refunded contributions and any interest that has accrued to regain the lost service credit. 

If you elect to withdraw your Member Contributions from SCERS and terminate your SCERS membership, you may elect to receive the payment from SCERS using the following options:

  • Your withdrawal may be paid directly to you in a lump sum. If you are under age 59 1/2, and elect a lump sum payment, you may be subject to tax or additional early withdrawal penalties. SCERS is required to withhold taxes from your lump sum distribution. Return of contributions is not immediate and is dependent upon the submission of information from you and your employer.
  • Your withdrawal may be paid through a direct rollover to another eligible retirement account. When you choose a direct rollover, your account balance may be disbursed as follows:
    • Pre-tax contributions may be rolled over into an eligible retirement account, such as an IRA or another employer’s eligible retirement plan.
    • After-tax contributions may be rolled over into a Roth IRA or paid directly to you. You may choose the amounts to be rolled over into each account.

You may choose to have certain amounts of pre-tax or after-tax funds paid directly to you. Keep in mind that a distribution of amounts contributed to SCERS on a pre-tax basis will be subject to tax withholding.

Option 2: Leave Your Contributions on Deposit as a Deferred Member

  • Retain your SCERS membership
  • Continue earning interest on your contributions
  • Keep your service credit and benefit tier
  • Eligible to retire later if you meet age and vesting requirements

This is called deferring your membership, and you may wish to consider remaining a deferred member if you:

  • Are already vested and plan to receive a pension from SCERS later, or
  • May return to SCERS-covered employment, or
  • Plan to establish reciprocity with another California public retirement system

Vesting and Benefit Eligibility

You are vested if:

  • You’ve earned 5 years of full-time service credit, or
  • You reach age 70, regardless of the number years of service, or
  • You qualify through a reciprocal system

Once vested, you’re entitled to a lifetime monthly benefit once you reach the minimum retirement age for your tier—even if you don’t return to public employment.