Base Plan Account Withdrawals
An account withdrawal (separation benefit) is a lump-sum payment of the money you contributed to the PERSI Base Plan, plus the interest accumulated on your contributions. It does not include employer contributions. You are eligible for a Base Plan account withdrawal if you were an active member and have terminated PERSI-covered employment. You must be an inactive member to withdraw your funds. You are not eligible if you are working for a PERSI employer, even part-time, or are on a leave of absence. There are no loan or hardship withdrawal provisions for the PERSI Base Plan.
When you withdraw the funds in your Base Plan account, you cancel all credits toward your retirement. If you have enough service to qualify for a monthly benefit at retirement, you also cancel your eligibility for that benefit. If you return to eligible public employment, you will begin accruing service again; however, you may also buy back your past credits. PERSI recommends you consult with a tax advisor before taking or repaying an account withdrawal.
Account Withdrawal Payment Procedure
To process a withdrawal, you must submit a Base Plan Account Withdrawal Form. If you choose to roll over your funds to a tax-deferred IRA or another qualified plan, PERSI will also need the name, address, and account information for the other plan. Regardless of when the form is received, no refund will be paid before the employer submits the employee’s final salary information and provides a termination date through the regular transmittal.
Taxes on Account Withdrawals
PERSI is required by law to withhold federal taxes of 20% on withdrawal payments of tax-deferred contributions and interest unless you roll over your funds directly to another eligible retirement plan or IRA. In addition to any applicable federal, state, or local taxes, you may be required to pay a federal tax penalty of 10% on your tax-deferred contributions and interest. PERSI suggests that you consult with a tax or financial advisor about current tax requirements.
If, after receiving your account withdrawal, you become employed by a PERSI employer in an eligible capacity, you may be eligible to buyback, or reinstate that previously withdrawn service credit. The cost to reinstate the service credit is the amount of the separation benefit, plus all interest that would have accrued had the account withdrawal not occurred. To initiate a buyback, contact the PERSI Answer Center at 208-334-3365.
Choice 401(k) Plan Account Withdrawals
If you are no longer employed by a PERSI employer, you are able to make a withdrawal from your PERSI Choice 401(k) Plan account. To initiate a withdrawal, simply call Empower Retirement at 866-437-3774 or log in to your Choice 401(k) Plan Account. Once your account balance goes to zero, it’s closed. If your account balance is greater than $1,000, you can leave your money in the plan.