Leaving IPERS-Covered Employment Before Retirement
Choosing the Best Alternative For You |
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Alternative 2: Roll Over Your Money to Another Retirement Plan
A rollover transfers your money from IPERS to another eligible retirement plan. By rolling over your money to another plan, you continue to set aside the money for retirement. If you roll over your IPERS money, you defer income tax liability (and avoid a 10 percent early-distribution tax, if applicable).
When rolling over your money, you may roll over all of your taxable money to an eligible plan, or receive some of your money as a cash refund and roll over the rest of your money. When taking a rollover, you must withdraw all of your IPERS money; you cannot leave some of your money in IPERS.
To Be Considered an Eligible Retirement Plan, a Plan Must Be:
- A traditional IRA (not a SIMPLE IRA or Coverdell Education Savings Account, formerly known as an Education IRA).
- A Roth IRA.
- An eligible employer plan, which includes a plan qualified under Section 401(a) of the Internal Revenue Code (including a 401(k) plan, profit-sharing plan, defined benefit plan, stock bonus plan, money purchase plan, Section 403(a) retirement plan, Section 403(b) tax-sheltered annuity, and eligible Section 457(b) plan maintained by a governmental employer).
| What You Need to Know About Taking a Rollover or Cash Refund |
IPERS provides a lifetime, monthly benefit to vested members whose monthly benefit is $50 or more. (See vesting requirements in "The IPERS Plan" in this brochure.) When you take a rollover or cash refund, you give up your IPERS membership rights for that period of employment. |
If you decide to roll over your contributions, you need to confirm that the plan you’re rolling your money over to is an eligible plan and find out whom the rollover check should be made payable to. You must include this information, and the type of plan you are rolling your money into, on your Application for IPERS Refund. IPERS will send your rollover check directly to your rollover institution on your behalf.
| Full or Partial Rollovers |
When you roll over money, you can:
- Roll over all of your distribution.
- Take part of your distribution in cash and roll over the rest of your taxable distribution.
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