Withdrawals
As a member of OPERS you make a mandatory contribution every paycheck. Your employer also makes a much larger contribution. These funds are invested by OPERS with the expectation you will one day be eligible to receive a monthly lifetime retirement benefit.
While working for an OPERS employer, you may not take a withdrawal or loan from the contributions paid to OPERS. Retired members who already receive a monthly benefit cannot withdraw any contributions paid to OPERS.
Leaving employment prior to retirement? You have options
In most cases you do not have to take out your contributions. If you have at least eight years of credited service, you are considered vested, which means you may receive a future benefit. If you do not have enough service to retire or vest, you can leave your contributions in the OPERS Plan. In either case, should you return to work with a participating employer, you will pick-up where you left off.
Vest/Leave Contributions
- Could receive a future lifetime benefit.
- Service remains in place.
- Pick-up where you left off if you return to OPERS employment.
- Remain under the rules in place at the time of your original employment.
Withdraw
- No lifetime benefit.
- Service is canceled out, including prior service.
- You give up any monthly payment OPERS would have made toward your health insurance at retirement.
- If you return to OPERS employment, you will start as a new OPERS member with no service.
- You will be under the rules as of your most recent hire date.
Often, a retirement benefit over one’s lifetime has a greater value than the amount of contributions paid.
Withdrawing Contributions
When taking a withdrawal, you will receive a one-time payment of all your employee contributions into OPERS less applicable taxes and penalties. No interest or increased value is paid on employee contributions. The employer contributions always stay in OPERS.
Requirements
- You must have ended employment before your withdrawal can be processed.
- You cannot return to work for any OPERS employer for four months after your termination. This mandatory waiting period can only be waived if the member is terminally ill, under certain circumstances.
- At the earliest payment may be made in the fifth month after separation.
Applying for Withdrawal
Contact OPERS to request a Withdrawal Packet. Packets will only be mailed to the name and address we have file. If your information has changed, you must first update your name and/or address. The packet will contain instructions, information and the forms needed to process your withdrawal.
- Member signatures need to be original and in ink when submitted to OPERS.
- We suggest collecting employer and financial institution signatures before signing the forms as the withdrawing member. Copies of signatures from the employer and financial institution will be accepted.
- All forms and documents must be submitted together, or your application will be rejected. A checklist is provided to review needed documents.
Once your forms are approved, we will mail you a letter with more information and an estimated payment date. At the earliest payment may be made in the fifth month after separation. An additional form will be sent to you if you have enough service to be eligible for a lifetime benefit. You must waive this benefit to continue your withdrawal.
Taxation of Withdrawn Contributions
The following is not intended to be tax advice. OPERS strongly encourages a member to seek the advice of a competent professional tax adviser before requesting payment of withdrawal.
A withdrawal may be subject to taxes if it is not rolled over to another tax-deferred account.
Federal Tax – 20%
Oklahoma State Tax – 4.5%
You may indicate on Form A (included in the Withdrawal Packet) to have additional taxes withheld.
A 1099-R will be mailed to you the following January.If you are under age 59½ at the time you take a withdrawal, you may be subject to a 10% federal tax penalty for early withdrawal. This tax penalty is in addition to regular federal and state income taxes and would be assessed when you file your taxes.
A Special Tax Notice with more information on taxes and full or partial rollovers will be included in the packet.
View frequently asked questions about the withdrawal process.
Returning to Work with an OPERS Participating Employer
Returning to work within four months after your termination will make your withdrawal application invalid. You will be required to pay back the full amount of any ineligible withdrawal payment plus applicable interest. It is your responsibility to let OPERS know if you return to work with any participating employer.
Repaying a Withdrawal To Reinstate Service Credit
If you return to work for an OPERS participating employer after withdrawing contributions, you will begin your new job as a new OPERS member. This means you will start with no service credit and be under the plan rules based on when you were most recently hired.
However, you may restore your service credit, if eligible, through a withdrawal payback. This will also move you back under the rules in place as of our original date when you first joined OPERS. Use our Withdrawal Payback Calculator to estimate the cost and start the process.
Withdrawal Frequently Asked Questions
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Am I required to withdraw my funds if I leave employment?
No. You do not have to withdraw your contributions. If you leave your contributions, your service will also remain in place. Should you return to work with the same or different OPERS employer, you will pick-up where you left off. You will also remain under the rules in place at the time of your initial employment.
Are there consequences to withdrawing?
When you withdraw your OPERS contributions, you cancel your OPERS service credit. You will not receive any future monthly lifetime benefit you may have been eligible to receive. You will be giving up any future monthly payment OPERS would have made toward your health insurance at retirement.
What is a future monthly lifetime retirement benefit?
OPERS is a defined benefit plan. A defined benefit plan promises its members a lifetime retirement benefit when the member meets certain eligibility requirements. This benefit provides a retirement income, based on a formula, for the remainder of the member’s lifetime. Visit opers.ok.gov/benefit-estimator to learn how this is calculated.
Can I still get a future benefit if I leave employment before I'm eligible for retirement?
If you have at least eight years of service when you leave employment, you are entitled to a lifetime vested benefit when you reach retirement eligibility. OPERS will calculate the amount of your vested, monthly lifetime retirement benefit before processing your withdrawal payment. By law, you must choose between accepting the vested benefit or proceeding with a withdrawal. If you proceed with the withdrawal, you give up your right to the future monthly lifetime retirement benefit. An additional form will be sent to you if you have enough service to be eligible for a future monthly lifetime retirement benefit. You must complete and return this form to waive your future monthly lifetime retirement benefit and continue the withdrawal.
Will withdrawing impact my ability to keep insurance for retirement?
Withdrawing does not change your eligibility for keeping insurance through EGID (Employees Group Insurance Division). However, by taking a withdrawal, you cancel your service in OPERS and give up a future monthly retirement benefit, which includes giving up a monthly payment OPERS would have made toward your health insurance at retirement. For information on keeping your insurance benefit, you must contact the EGID of Oklahoma Health Care Authority at (405) 522- 7300.
Will my payment be taxed?
A withdrawal may be subject to taxes if it is not rolled over to another tax-deferred account. For payments made directly to you, OPERS is required to withhold 20% for federal taxes and, for Oklahoma residents, 4.5% for state taxes. You may choose to have additional taxes withheld on Form A. OPERS will mail you a 1099-R the following January.
Those under the age of 59½ at the time of withdrawal may be subject to a 10% federal tax penalty for early withdrawal. This tax penalty is in addition to regular federal and state income taxes.
For a full or partial rollover, review the Special Tax Notice for more information on taxes.
How much can I withdraw?
When withdrawing, you withdraw all employee contributions less applicable taxes and penalties. No interest or increased value is paid on employee contributions. Employer contributions remain with OPERS.
Do I need to complete all the forms in this packet?
The completed Application for Withdrawal, Employer Certification of Separation for Withdrawal and Form A – Designation of Distribution must be returned. To complete a rollover to another eligible account complete and return Form B and/or Form C.
Can I send in a copy of the form?
No. We require the member’s original signature in ink. Copies or scanned versions of the form without the member’s original signature will not be accepted.
Copies of forms with employer and financial institution signatures will be accepted.
What if I'm no longer near my former employer?
The Employer Certification must be completed and returned. Contact your former employer to obtain the completed form. A list of employers with contact information can be found on our website at opers.ok.gov/coordinator-listing.
How long will it take to receive my payment?
The withdrawal payment is made no earlier than the fifth month after separation of employment. Oklahoma law (74 O.S. §917) requires a waiting period of four months from the date of termination for all withdrawal payments. Once the forms are approved, you will receive a letter with the payment date. Returning to employment with an OPERS participating employer within four months of your separation date will cancel your withdrawal.
How do I update my name or address with OPERS?
Verify your name and address are correct with OPERS by reviewing the accumulated contribution statement in this packet. Complete the Change of Address or Change of Name form(s) on the OPERS website to update your information.
What if I return to work with an OPERS participating employer after withdrawing?
You will enroll as an OPERS member with no service credit and under the plan rules in place at your most recent hire date. You may restore your withdrawn service credit, if eligible, by paying the sum of your withdrawn contributions plus interest. Contact OPERS for information on repaying withdrawn contributions.