Leaving School Employment

If you haven't worked enough years or you're too young to qualify for a monthly pension benefit, this section will help you understand what options are available so you can better manage your retirement plan.

If you're close to meeting the minimum age and service requirements for a pension benefit, be sure you understand the information presented under Ready to Retire before making any decisions.
 

Think about your choices.

All Member Investment Plan (MIP) members and some Basic Plan members had personal contributions withheld from their wages and deposited with the retirement system. Any purchased service credit is also considered part of your personal contributions. These contributions normally help fund your monthly pension benefits once you reach retirement age. 

However, when you leave public school employment before you're eligible to retire, you can choose what to do with your retirement account. You can:

• Leave your contributions on account; or

• Request a refund of the money you've paid into your retirement account.

One of the biggest factors in your decision should be whether or not you are vested before you leave public school employment. 

I'm not vested. What should I do?

If you have fewer than 10 years of service credit when you leave school employment, you're not eligible for a future monthly pension.

Can I take a refund? 

Yes. You can request a refund (or transfer your personal contributions and interest to another qualified retirement plan) using miAccount at any time after you terminate.

Note: Your contributions to the Retiree Health Care Fund are not refundable. The IRS does not allow refunds from this type of fund.

Consider the following points before you request a refund. 

• All service credit is forfeited. By taking a refund of contributions, you forfeit all of the corresponding service credit. 
• Reinstating service. If you return to public school employment, you may repay the amount that was refunded to you, plus interest, to restore your previous service. 
• It's all or none. You cannot request a partial refund - all personal contributions must be refunded. 
• Taxes and potential penalties. Any refund may be subject to federal and state tax withholding and early withdrawal penalties, as required by the IRS. We recommend you talk with your tax advisor about the tax implications before you request a refund. 
• Consider a plan-to-plan transfer. You can transfer the amount of your personal contributions and accumulated interest to another qualified tax-deferred savings plan to avoid taxes and penalties. Again, talk with your tax advisor and confirm with your plan administrator that your transfer meets IRS requirements. 

To request a refund, log into miAccount and select Refunds on the left navigation. Once we receive your completed request, we'll either send:

• Your account balance in a lump sum (less required tax withholding) to you;
• Your untaxed contributions and interest as a transfer to your qualified retirement plan administrator, and previously taxed contributions sent to you; or
• An amount of your untaxed contributions and interest (specified by you) as a transfer to your qualified retirement plan administrator, and the remaining balance paid directly to you (less required tax withholding). 

What happens if I die? 

If you did not take a refund, upon notification by your survivor, we will return any personal contributions and accumulated interest to your refund beneficiary or your estate.

Before you leave your job, be sure to name your refund beneficiary using miAccount, or send a completed Beneficiary Nomination (R0315C) form to ORS, to designate who will receive your contributions.

If you beneficiary's name is not on file with ORS, your personal contributions and accumulated interest may be distributed by probate court order. 

I'm vested. What should I do?

If you are vested with 10 years of service credit when you leave public school employment and you leave your contributions on deposit with ORS, you will be eligible for monthly pension benefits when you reach the minimum age for full retirement. Because you are deferring your pension until you reach the minimum age for retirement, you are a deferred member. 

Should I take a refund? 

Rarely is it advisable to take a refund of your personal contributions once you are vested. A refund forfeits all rights to any future pension and insurance benefits for you and your beneficiary. Carefully weigh your personal contributions against the value of your future lifetime pension and insurance benefits.

Note: Your contributions to the Retiree Health Care Fund are not refundable. The IRS does not allow refunds from this type of fund.

When can I get my pension? 

Most deferred members will be eligible at age 60. If you have 30 years of service, it may be sooner.

Be sure to apply three to six months before you meet the age requirement - your pension won't be any higher if you wait, and you could even lose money by waiting. 

Your pension is calculated the same as a full retirement. For more details about receiving your pension, click here.

Will I get insurance benefits? 

You may be eligible for group insurances as a retiree. You may also qualify for an insurance premium subsidy if you had at least 21 years of service when you terminated. Your premium subsidy is based on the number of credited years of service over 20. If you left public school employment with less than 21 years of service, you may be able to enroll in group insurances, but will need to pay the full premium. 

What happens if I die? 

If you die before you're eligible for a pension (while in deferred status), your eligible survivor pension beneficiary will qualify for a monthly pension and insurances provided (1) you have at least 10 years of service credit (15 years if you're a Basic Plan member); AND (2) you named your beneficiary with ORS before you terminated employment. Beneficiaries eligible for a monthly pension benefit include your spouse or an unmarried child under age 18; OR a child over age 18, parent, brother, or sister who is dependent on you for support. 

The deferred monthly survivor pension becomes payable the month following when you would have turned age 60; it is paid as if you had chosen the 100 percent survivor option. 

If you did not designate a beneficiary while actively employed or your named beneficiary who does not meet the eligibility requirements for a pension benefit, no monthly pension benefit can be paid. A refund of personal contributions and accumulated interest will be paid to your estate. 

When to Contact Us 

Before you leave. 

Be sure your beneficiary designation is on file with ORS before you terminate employment.

Important: Do not select the Default Provision - it does not apply to deferred members.

Use miAccount to review your retirement account. Make sure you understand how your termination could affect your future retirement plans. 

After you leave. 

Keep your address updated using miAccount. We will not be able to reach you through your employer. 

If your marital status changes or the beneficiary you named is no longer eligible, use miAccount to keep your information up-to-date. For example, if you marry or divorce you may need to change your address, your name, or your beneficiary designation. If you named a child as your pension beneficiary and this individual no longer depends on you for support, you may need to name a different beneficiary. 

Preparing for retirement. 

If you're in deferred status, attend a preretirement seminar a few years before you reach age 60. 

About three to six months before you reach eligibility age, start reviewing our website and the retirement application in miAccount so you'll be ready when the time comes to apply. 

If you die. 

Your survivor should contact us upon your death even if he or she is not eligible for a monthly survivor pension benefit. We will ask for your social security number or member ID to identify your retirement account, and we may request a copy of your death certificate. We will then review your record to determine what is payable.