Employer Information: Terminated Employee Refund Information

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Refunds of Pension Plan Contributions and Interest

Self-Service Portal: With the exception of vested accounts, refunds for terminated, inactive members can be requested by submitting an application or online through our website. However, ERSGA membership status must be Inactive. Please allow 30-45 days from the date of termination for the membership account to reflect Inactive status.

Note: For online refund applications, the employer must complete Adhoc Termination steps via the employer self-service portal if ERSGA has not yet received the Termination Status.

Refund Process for Non-Vested Refunds/Distributions

  • A terminated employee is eligible to receive a refund of employee contributions plus interest.
  • Refunds can be requested online at our website at ers.ga.gov.
  • Refunds are processed within 2-4 weeks upon receipt.
  • Payrolls are weekly.
  • Refunds can be requested as a Direct Deposit or check.
  • If a member cannot apply for a refund online, they must contact ERSGA to request a refund application.

Refund Process for Vested Refunds/Distributions

  • The member must contact ERSGA to request a refund – ERSGA will send a refund application.
  • The original, completed Refund Application must be mailed to ERSGA or uploaded to the member’s ERSGA online account.
  • An estimate must be generated.
  • The original Vesting Letter must be mailed back to ERSGA.
  • A tax election letter/special tax notification must be completed and sent to ERSGA if interest amount is $200.00 or more
  • If a member is eligible for retirement benefits (age 60 with 10 years creditable service), an estimate is requested internally and the information is sent to the member. The estimate affords the member an opportunity to re-evaluate the refund request in light of their eligibility for a lifetime retirement benefit.

More Information on Applying for a Refund

ERS – Old Plan, New Plan, and GSEPS refunds:

  • Members participating under the Old Plan (01/01/1950-06/30/1982) are refunded employee and employer (pick-up) contributions and accrued interest. ERSGA will send an Affidavit of Residency, which must be completed and returned with appropriate, government-issued ID before the refund can be processed.
  • Members participating under the New Plan (07/01/1982-12/31/2008) are refunded employee contributions and accrued interest.
  • Members participating under GSEPS (hired on or after 01/01/2009) are refunded employee contributions and accrued interest.

Other Plans:

  • Members participating under JRS and LRS are refunded employee and employer (pick-up) contributions and accrued interest. For members with pick-up, ERSGA will send an Affidavit of Residency which must be completed and returned with appropriate government-issued ID before the refund can be processed. 
  • Members participating under the PSERS and GDCP are refunded employee contributions and accrued interest.

Group Term Life Insurance (GTLI) premiums are non-refundable.

All eligible funds per membership are included in the refund total; partial refunds are not available.

Tax Information

Only the pre-tax employee contributions and interest portions of a refund are taxable. If the taxable portion of the refund exceeds $200, then a Tax Election Form must be sent to the member giving an option to rollover or be taxed.

Note: The vast majority of employee contributions in the ERSGA pension system are after-tax contributions, and will not be taxed. 

Federal taxes are withheld at a 20% withholding rate from the refunded taxable amount only. No State taxes are withheld. Please note, an additional 10% federal tax penalty may apply on the taxable portion when refunding an account prior to age 59.5.  To avoid taxes and the 10% penalty, pretax money can be rollover over to another qualified plan or IRA.

Rollover

The member has the option to roll over the taxable portion to another qualified plan or IRA. If the member wishes to roll over the non-taxable portion of the refund, verify with the accepting financial institution that the non-taxable contributions are eligible for roll over.

Payroll

Refund payrolls are weekly.

Return of a Refund

If a member wishes to rescind a refund after their application has been received and before payment is processed, the request to nullify the refund must be made in writing.

If a member wishes to rescind a refund after receiving a check, the check must be returned, un-cashed and submit a written request to re-establish their service.

Once a refund check has been cashed, deposited, or rolled over, a member waives all rights to any future benefits including Old Plan memberships, New Plan membership, and GTLI coverage. The exception is a Refund Buyback, in which a member can purchase refunded service after two years of consecutive service; however, the member would enter ERS membership in the plan tier in effect at the date of rehire. 

Termination and Peach State Reserves (PSR) Accounts

This below information is for members who are leaving state employment. Members transferring between agencies are not eligible to take a payment from their PSR retirement account.

Vested with Balance of $1,000 or Less

Accounts are automatically paid out if $1,000 or less, known as a force-out. The member will be paid the balance of their account approximately 90 days after termination, according to the date on the Separation From Employment Notice.

  • If account balance has increased above $1,000 on payment processing date, payment will not process

If a Member does not want to trigger a force-outthe balance on their account must be above $1,000, or request a distribution 30 days from their termination date and before the force-out date.

After initial termination, account balances are reviewed on a quarterly basis for force-out criteria. Members can check their balance on the GaBreeze website, or by calling GaBreeze.

If a force-out is pending on the member account, the member can request a total distribution, which will cancel the force-out, unless an  affidavit is required. The force-out will remain until the completed affidavit is received and processed prior to the fore-out date.

Vested with Balance Greater than $1,000

Terminated PSR participants with a balance greater than $1,000 may leave funds in PSR and continue to manage their investment elections as they did while actively employed.

If a distribution or withdrawal is desired, terminated participants may request all or part of their vested account balance 30 days after receipt of separated from service status.

Note: Please encourage terminating members to roll over their PSR account into another retirement account instead of taking a lump sum. Rolling their PSR funds into another account avoids a taxable event and promotes retirement readiness. More information on rollovers below.

Any member requesting a distribution containing State of Georgia matching contributions must complete a Residency Affidavit and submit it with a copy of a government-issued picture ID (e.g., Driver license, Passport, etc.).

Terminated participants enrolled in Professional Management with Alight Financial Advisors may continue with the service.

Depending on the distribution option, a member can elect direct rollover to an eligible employer plan or an IRA for eligible amounts.

Note: If a member has funds in the Self-Directed Brokerage Window and not in a core fund, the funds must be moved back to core funds in order to remove the funds from the account.

If the member is considering a rollover to an IRA:

  • The member must first set up an IRA. The member can open a new IRA or roll over to an existing IRA.
  • If the member chooses to roll over to a Roth IRA, any taxable amounts rolled over will become taxable in the year of the distribution. For example, if the member rolls over $50,000 of before-tax money to a Roth IRA, the $50,000 will be included in their annual income when filing taxes.

If the member is rolling over to an existing IRA, they must provide the following information:

  • The name of the receiving institution
  • Their account number
  • The institution’s address
  • The account type (for example, traditional IRA or Roth IRA)

Rules for Roth

If the participant is rolling over their Roth withdrawal to another employer plan, called a direct rollover:

  • Is the only way the non-taxable portion of the Roth withdrawal can be rolled over
  • Will carry over the Roth begin date

If the participant is rolling over their Roth withdrawal to a Roth IRA:

  • The Roth begin date won’t be carried over. The Roth IRA begin date will apply.
  • The rollover can be a direct rollover or 60-day rollover.

More Information about Rollovers

If a participant plans to roll over payment into another qualified plan or an Individual Retirement Account (IRA), State of Georgia needs the rollover institution information on file at least 7 days in advance of the payment request.

Distribution Information

A participant may defer distributions until:

  • age 70½ for those born before July 1, 1949, or
  • the year you turn 72 for those born on or after July 1, 1949

A member may request a lump-sum distribution in cash; however, please remind the participant of the tax implications of a lump-sum payment. Members can use the calculators at GaBreeze to compare the tax impact from a cash payment versus a rollover.

Participants can also choose:

  • Partial distribution
  • Fixed Installments
  • Calculated Installments

Not Vested or Partially Vested 

PSR 401(k) Plan

  • If partially vested, the participant will forfeit the non-vested portion of employer contributions and attributable earnings
  • Non-vested portion will be forfeited at earlier of:
    • Date of distribution
    • 90 days from separation
    • At rehire if less than 90 days from separation