- If you terminate employment with your FRS employer and begin working for another FRS employer, you'll continue to participate in the Pension Plan and accrue a benefit. Your combined service with all FRS employers will count in calculating your final retirement benefit.
- If you're vested when you leave FRS-covered employment and go to work for a non-FRS employer, your benefit will be frozen and remain in the Pension Plan until you're eligible for early or normal retirement.
Your benefit will remain frozen and won't increase in value until you start receiving your benefit payments. However, if you begin working for an FRS employer again, your previous service credit will count toward vesting and future benefits for which you may become eligible.
If you're not vested when you leave FRS-covered employment, you won't receive any benefit from the Pension Plan (except for a refund of employee contributions - see below). Any employer contributions made on your behalf will be forfeited, unless you return to work for an FRS employer at some time in the future and become vested.
Employee contributions are always 100% vested. This means that if you terminate employment prior to meeting the vesting requirements of the Pension Plan, you will be entitled to a refund of your employee contributions. However, taking such a refund may not be a sound financial decision because, if you return to FRS employment at a later date and wish to restore all service associated with the refund, you will be required to purchase back the refunded service plus interest.
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If you leave employment with your FRS employer and begin working for another FRS employer, you'll continue to participate in the Investment Plan. You will continue to receive contributions to your account and receive any investment earnings on your account balance.
If you're vested when you leave FRS-covered employment and go to work for a non-FRS employer, you can:
- Leave your account in the Investment Plan, where it will remain invested until you withdraw it;
- Roll your account over to an Individual Retirement Account (IRA) or to the plan of your new employer, if that plan accepts rollovers*; or
- Have your account paid to you. You'll have to pay taxes on this amount in the year during which it's paid to you. See the Taxability of Benefit section for more information.*
If you're not vested when you leave FRS-covered employment, you won't receive any benefit from the Investment Plan (except for a refund of employee contributions - see below). Any employer contributions made on your behalf will be placed in a suspense account for 5 years and will accrue interest earnings. If you return to FRS-covered employment within 5 years, you will regain control of the funds in the suspense account and again begin to accrue a benefit in your Investment Plan account. If you do not return to FRS employment prior to the end of the 5-year period, your account will be forfeited.
If you transfer Pension Plan accrued benefits to the Investment Plan and you terminate employment before completing the Pension Plan's 8-year vesting requirement (6 years if enrolled in the FRS prior to July 1, 2011), the amount you transferred will be placed in a suspense account for 5 years, where it will accrue interest earnings. If you do not return to FRS employment within five years, this amount will be forfeited.
Employee contributions are always 100% vested. This means that if you terminate employment prior to meeting the vesting requirements of the Investment Plan, you will be entitled to a refund of your employee contributions. However, taking such a refund may not be a sound financial decision because you will forfeit any unvested employer contributions and service credit associated with the service and be declared a retiree. As a retiree you will not be eligible for future FRS membership if you return to FRS-covered employment.
*If you take any distribution from your Investment Plan account (including a rollover) you will be considered a retiree. Renewed membership in the FRS is available if you retire and are initially reemployed by an FRS employer in an FRS-covered position prior to July 1, 2010. Renewed membership in the FRS is not available if you retire and are initially reemployed on or after July 1, 2010.
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