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What is Vesting?

If a member terminates employment and has completed at least 8 years of credited service, he or she is eligible to vest. This means the member is eligible to elect to have the right to receive a retirement benefit when he or she becomes eligible for normal or early retirement. However, of the 8 years needed, at least 6 of those years must be full-time equivalent employment with a participating OPERS employer. If a member chooses the right to a retirement benefit in lieu of withdrawing the member's accumulated contributions, the Retirement Coordinator and the member must complete a form entitled Application for Vested Benefits (515-118VB-00) and submit it to OPERS.

Of course, a member may, instead, withdraw his or her accumulated contributions in a lump sum. If a member who is ELIGIBLE to elect a vested benefit wants to withdraw his or her contributions, he or she, along with the Retirement Coordinator, must complete an Application for Withdrawal. When OPERS receives it, we will provide the member with notice of an estimate of his or her retirement benefit and other information which constitutes an offer to the member of an election of a vested benefit.

When you, the member, elect a vested benefit you don't receive a retirement benefit right away. It DOES reserve your right to draw one in the future - when you are eligible. The benefit at that time will be based upon the final average compensation and service credit which the member had accrued before termination.

Example 1:
Zelda, age 33, terminates with 9 years of service. If she elects a vested benefit, she may draw benefits at age 62.

Example 2:
George, age 52, terminates with 25 years of service. If he elects a vested benefit, he may draw full benefits at age 55. (55 + 25 = 80)

In most cases, the receipt of a retirement benefit is more beneficial than receiving accumulated contributions. Often times, the receipt of a retirement benefit over one's lifetime has a monetary value which is greater than the amount of the member's accumulated contributions. Also, electing a vested benefit ensures that the member will receive an income from this System during the retirement years or provide a survivor benefit in the event of death.

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