Refund of Member Contributions Overview
As you review this information, it's important to remember that once a refund is issued, your CalPERS membership is terminated and you lose the right to receive a service or disability retirement benefit, unless you are a vested member under State Second Tier. Since this can impact your future retirement income, please carefully consider your decision to refund. If you are moving from one CalPERS-covered employer to another or you have accepted employment covered under another publicly funded California retirement system, you may not withdraw your retirement contributions.
When you permanently separate from all CalPERS-covered employment, you can leave your contributions on deposit and apply for retirement benefits when you meet the minimum retirement eligibility requirements, or you can elect to refund your contributions and any interest earned. As a State member, you do this by completing a Separation/Disposition of CalPERS Contributions (STD-687), available from your personnel office. This form is used to report a resignation, make a CalPERS refund election, and provide us your final mailing address.
You are entitled to make an election as to the disposition of your contributions by completing Section D of the form. If you don't complete this section, or leave employment without completing the STD-687, you'll need to complete the CalPERS refund form. Download the refund package (PDF) or call us at 888 CalPERS (or 888-225-7377) to request one be mailed to you.
The employer's contributions are not refundable. Only the contributions you make, or that your employer makes on your behalf, are refundable. If you elect a refund of contributions, the taxable portion of your refund will be subject to mandatory federal tax withholding of 20 percent. You also have the option to have 2 percent State tax withheld from the taxable portion of the refund. If you live in California and do not make a State tax election, State tax will automatically be withheld. The only way to avoid this withholding is by electing to rollover the taxable portion of your refund into an IRA or other eligible savings plan. When completing form STD-687, the page titled “CalPERS Direct Rollover Election Form” must be submitted to CalPERS to elect a rollover.
Once we receive the separation/disposition notification from your employer or your completed refund election form, we will process your refund. Common errors that can result in us having to return your form are:
- You don't sign the form.
- Your spouse or registered domestic partner doesn't sign the form.
- You don't sign the Justification for Absence of Spouse's or Registered Domestic Partner's Signature (BSD-800A) (PDF) form or check the "I'm not legally married or do not have a registered domestic partner" box.
- The form hasn't been notarized or signed by an authorized CalPERS representative.
Federal legislation, known as Required Minimum Distribution (RMD), requires that you begin to take at least a minimum amount out of any tax deferred account beginning with the year you attain age 70 ½. However, laws governing the administration of a CalPERS account do not permit a member to withdraw a portion of his/her contributions. Therefore, to comply with RMD regulations, members must either retire, if eligible, or withdraw all contributions and thereby terminate CalPERS membership unless they continue to meet State Second Tier eligibility requirements. A part of the taxable portion of the refund will be deemed RMD and you can elect to have federal tax withheld at 10 percent for this portion. The remaining balance, not subject to RMD, will be taxed at the mandatory 20 percent federal tax withholding and optional 2 percent State tax withholding unless you elect to rollover the amount to an IRA or other eligible retirement plan. If you live in California and do not make an election, State tax will automatically be withheld.
Every October, CalPERS sends letters and election forms to all members approaching age 70 ½ notifying them that they must either refund or retire when they attain age 70 ½. The RMD refund election forms are designed to be case specific based on the member’s age and retirement eligibility, therefore they are not available on our website. If you are, or will be age 70 ½ this year, and would like to request an election form, please call Customer Contact Center at 888 CalPERS (or 888-225-7377).
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