Refund Member Contributions (2024)

CalPERS is a defined benefit plan funded by:

Employee contributions
(Most employees contribute a percentage of their salary, which accrues interest under their individual CalPERS account.)
Employer contributions
Earnings made on CalPERS investment

As a member, you may choose to take a refund of your member contributions and interest if you no longer work for a CalPERS-covered employer. Taking arefund terminates your CalPERS membership and you forfeit your right to future benefits. This means you lose the right to receive a service or disability retirement benefit, and your beneficiaries won't be eligible for any survivor benefits from CalPERS. Since this can impact you and your family's future retirement income, think carefully about your decision to refund.

Consider the following before you apply for a refund of contributions:

A refund is irrevocable; once processed, you'll be unable to change or cancel the distribution.
California law doesn't allow you to take a partial refund or borrow against your accumulated contributions and interest on your account. Funds in your CalPERS account are paid in full upon completion of the refund process.
Employer contributions aren’t refundable. The amount contributed by your employer goes into a separate fund that is used only to pay the pension portion of retirement or survivor benefits.
You'll forfeit CalPERS benefits unless you return to CalPERS-covered employment.
Your refund will be taxed as income unless you request a rollover into a qualified tax-deferred retirement account. There is a federal mandate that requires CalPERS to withhold 20% federal income tax on all payments distributed directly to you. If you choose to have state income tax withheld, we'll withhold 2% state income tax.
You may be assessed additional federal and state taxes if you take your refund before age 59 ½ and do not roll over your funds to a qualified tax-deferred retirement plan.
You must notify us if you change addresses to ensure you receive your form 1099-R.
You may redeposit your contributions if you requalify for CalPERS membership or are a member of certain other California public retirement systems. Your cost will be higher than the amount of your refund and will increase over time due to interest. For additional information regarding purchasing service credit upon re-employment, view the Service Credit page.

Eligibility

You can refund your member contributions and interest if:

You've permanently separated from all CalPERS-covered employment.
(Your separation date must have been reported to us by your employer before we can begin to process your refund request.)
You're not entering employment with a CalPERS-covered employer.
You're not accepting a job covered by another California public retirement system and seeking to establish reciprocity.
(Reciprocity allows you to move from one retirement system to another without losing your benefits. You'll retire from both systems on the same date and your highest final compensation from either system may be used to calculate your retirement benefit. For more information on reciprocity, including the retirement systems with reciprocal agreements with CalPERS, refer to the publication When You Change Retirement Systems (Pub 16) (PDF).)
You're not moving to a position or employer covered under the California State Teachers' Retirement System, Legislators' Retirement System, University of California Retirement Plan, or Judges' I/II Retirement System.
(If so, you may not be able to refund your member contributions and interest. Contact us for specific information or refer to the publication When You Change Retirement Systems (Pub 16) (PDF).)

Before You Apply

Before you apply for a refund of contributions, access yourmyCalPERS account to determine if you may instead be eligible to retire and receive a lifetime monthly benefit. For additional information, review the Service Retirement page.

We recommend that before you submit your application, review the Frequently Asked Questions below.

What are my refund payment options?

You can choose to receive your refund as a direct deposit payment (in-hand distribution) or as a rollover to a financial institution.

When will I receive my payment?

We process complete refund election form packages in the order of receipt. You can typically expect to receive your refund within 30 to 45 days from the date we receive all your necessary forms. However, timeframes can vary if there are holds or other restrictions on your account that require review and action. Examples of items that will delay payment of your refund include:

Can I speed up my refund?

To ensure your refund is processed as quickly as possible, refer to these quick tips:

Provide complete and accurate information, including any necessary forms.
Request direct deposit.
Submit only one application.
(Be aware of the potential tax implications associated with your refund.)
There are penalties for not paying enough taxes during the year, either through withholdings or quarterly estimated payments.
If you receive your refund before age 59 ½ years, you may have to pay an additional 10% federal income tax and an additional 2.5% state income tax for early distribution.

We strongly encourage you to contact the California Franchise Tax Board, the Internal Revenue Service, or a professional tax adviser for additional information.

Can I have my refund deposited directly into my bank account?

Yes. In fact, we encourage you to request your in-hand distribution as a direct deposit. This is a secure and fast method of distributing your refund.

We don't currently offer direct deposit for rollover distributions. If you choose a rollover, your refund will be mailed to your mailing address on file so that you can deliver it directly to the financial institution noted on your refund application form.

What happens if I’m moving?

When you complete your refund application, provide your mailing address you would like your rollover check mailed to. If you move, immediately provide your new address to us. You can change your address online using your myCalPERS account or by contacting CalPERS at 888-225-7377.

It's your responsibility to provide mailing address updates to CalPERS to ensure that you receive your copy of the 1099-R form reporting your refund to taxing authorities.

Can I cancel my refund?

If your application has not yet been processed, you may be able to cancel your application. Contact CalPERS at 888-225-7377, if your paper application has not been processed. Once your Refund Application Election form is processed, it cannot be cancelled. Your decision is irrevocable.

Steps to Apply

Note: Our online refund request process using myCalPERS is currently unavailable.

Fill out the Refund Election Form Packet (myCalPERS 1202) (PDF, 1.07 MB).
Sign this form in the presence of a notary or authorized representative of CalPERS. If you're married or have a Registered Domestic Partner, your spouse or registered domestic partner must sign in the presence of a notary or authorized representative of CalPERS as well. To make an appointment with a CalPERS representative, call us at 888 CalPERS (or 888-225-7377).
Mail the completed form to:

CalPERS Member Account Management Division
P.O. Box 942704
Sacramento, CA 94229-2704

You can help us process your application by:

Confirming your mailing address and name listed in your myCalPERS account are accurate.
Verifying you have the correct financial information, such as plan name, if you're choosing to request a rollover of funds, or account and routing numbers if you're choosing a direct deposit.

Do you have funds on deposit in a dormant account? View the Obtaining Refunded Funds on a Dormant Account section below.

Obligations

We may be required to withhold deductions from your money if you have specific types of debt, such as but not limited to, the following:

Overpayment Recovery (you owe CalPERS money)
Personal Loan / Personal Loan Default (you previously took a loan against your retirement contributions)
Community Property / Child Support / Spousal Support (there is a court order)
Internal Revenue Service / Franchise Tax Board Tax Levy (you owe taxes)

If you have any of these obligations, the total amount due or the maximum amount available, will be withheld from your refund and reported accordingly. Tax withholding will generally be calculated on the total refund before satisfying the debt.

Required Minimum Distribution (RMD)

Federal and state law requires members to receive a Required Minimum Distribution (RMD) upon reaching age 73 on or after January 1, 2023. Failure to act will result in a refund to a non-interest-bearing account. Taxes will be deducted from the refund and paid to the Internal Revenue Service and Franchise Tax Board. A Form 1099-R will be issued and mailed to the address on record at the end of the tax year. If you’re turning age 73 during this calendar year and would like to request a refund of your accumulated contributions and interest, complete the Mandatory Refund Election Form With Required Minimum Distribution Packet (PDF, 1.5 MB).

Eligible RMD participants who are still actively working for another California retirement system may defer the mandatory distribution by responding to the notification and submitting the Active Employment Certification Form (PDF) certifying their active working status. This certification is required on an annual basis.

If an account is subject to an RMD, a participant can only rollover their non-RMD portion to an eligible plan. The RMD-calculated portion of the refund must be taken as a direct deposit. A participant may elect to have federal or state taxes withheld from the RMD calculated portion.

Obtaining a Refund from an Unclaimed Account

Members may have funds in a CalPERS non-interest-bearing unclaimed property account as a result of:

Failure to act upon reaching Required Minimum Distribution (RMD) age,
Being unable to be reached to issue a second refund due to late payroll reporting by an employer or crediting of employer paid arrears, or
Having a stale dated refund warrant that has not been deposited

To search for any unclaimed property in your name, or the name of a CalPERS member, visit Search for Unclaimed Property. Unclaimed property includes refunds, retirement benefits, and survivor benefits.

If an account has been dormant and has had a refund transferred to the unclaimed property account, a member may obtain the balance in this account by completing the Unclaimed Property Refund Application (PDF). Sign this form in the presence of a notary or authorized representative of CalPERS. To make an appointment with a CalPERS representative, call us at 888 CalPERS (or 888-225-7377).

If you’re a beneficiary of a deceased member who may have a stale dated refund warrant, call us. Our Survivor Benefits team will review your eligibility as a beneficiary.

As a seasoned expert in retirement plans and financial management, I bring a wealth of knowledge and experience to the table. With a deep understanding of pension systems and investment strategies, I am well-equipped to guide you through the intricacies of the California Public Employees' Retirement System (CalPERS).

Let's delve into the key concepts mentioned in the provided article:

CalPERS Defined Benefit Plan:
- CalPERS is a defined benefit plan, which means that members are entitled to a specific benefit upon retirement, based on a predetermined formula.
Funding Structure:
- The plan is funded through three primary sources:
  - Employee contributions: Most employees contribute a percentage of their salary, with these contributions accruing interest under their individual CalPERS account.
  - Employer contributions: Employers also contribute to the plan.
  - Earnings from CalPERS investments: The plan invests funds to generate returns, contributing to its overall financial health.
Refund of Contributions:
- Members have the option to take a refund of their contributions and interest if they permanently separate from all CalPERS-covered employment.
- However, taking a refund terminates CalPERS membership and forfeits future benefits, including service or disability retirement benefits and survivor benefits for beneficiaries.
Refund Process and Considerations:
- A refund is irrevocable once processed, and California law doesn't allow partial refunds or borrowing against accumulated contributions.
- Employer contributions are not refundable and are used exclusively for pension benefits.
- Refunds are taxable as income unless rolled over into a qualified tax-deferred retirement account.
Tax Implications:
- Federal law mandates a 20% federal income tax withholding on payments distributed directly to the member.
- Additional federal and state taxes may apply if a refund is taken before age 59 ½ without rollover to a qualified plan.
Eligibility for Refund:
- Members can refund contributions if they have permanently separated from all CalPERS-covered employment and meet specific eligibility criteria.
- Certain employment changes may affect eligibility, and members are advised to review reciprocity agreements with other retirement systems.
Refund Application Process:
- Members can apply for a refund through a formal process, which includes completing the Refund Election Form Packet.
- The process involves verification of personal and financial information.
Refund Payment Options and Timing:
- Members can choose direct deposit or rollover to a financial institution for their refund.
- Refunds are typically processed within 30 to 45 days, but delays may occur for various reasons.
Obligations and Withholding:
- Certain obligations, such as debt or overpayment recovery, may result in withholding from the refund.
- Required Minimum Distribution (RMD) is mandatory for members reaching age 73, and taxes will be deducted from the refund if not addressed.
Unclaimed Property:
- Members may have funds in a non-interest-bearing unclaimed property account for various reasons, such as failure to act on RMD or late payroll reporting.
- Unclaimed property can be reclaimed through the appropriate application process.

In summary, navigating the intricacies of the CalPERS system requires careful consideration of eligibility, tax implications, and the long-term impact on retirement benefits. It's crucial for members to make informed decisions and, when in doubt, seek guidance from financial professionals or CalPERS representatives.