When you terminate Colorado PERA-covered employment, you have two options with your Defined Benefit (DB) Plan account(s):
- Leave your account(s) with PERA for a future rollover/refund or monthly benefit.
- Do a rollover/refund of your account(s).
Leave Your Account(s) With PERA
You may want to leave your DB Plan account(s) with PERA, especially if you anticipate returning to PERA employment or if you would like access to a lifetime monthly benefit in the future. Your DB Plan account(s) will remain tax-deferred, continue to accrue interest, and you may do a rollover/refund at any time.
If you leave your DB Plan account(s) with PERA until reaching the age and service credit requirements for retirement eligibility or age 65, you may request a lifetime monthly retirement benefit or do a rollover/refund of your DB Plan account(s).
Rolling Over or Refunding Your Account(s)
You may roll over your DB Plan account(s) to an IRA or eligible employer plan or refund it. If you do a rollover/refund of your DB Plan account(s), you forfeit any future right to a benefit.
The amount of your rollover/refund will include:
- Your tax-deferred (pre-tax) member contributions.
- Any tax-paid (after-tax) money, if applicable.
- Interest compounded annually (the interest rate is set by the PERA Board and is subject to change annually; currently the interest rate is 3 percent).
- Money you paid to purchase service credit.
- Matching contributions, if applicable, see below.
Log on to your account to view the tax-deferred and tax-paid amounts in your DB Plan account(s).
Matching Contributions
PERA benefit structure
- If you are eligible for retirement, you will receive a 100 percent match equal to your contributions and interest.
- If you are not eligible for retirement but have five years of earned service credit, you will receive a 50 percent match on your contributions and interest.
- If you do not have five years of earned service credit, you will receive a 50 percent match only on contributions and interest received by PERA on or before December 31, 2010.
- Money you paid to purchase service credit is not eligible for a match.
DPS benefit structure
You will receive a 100 percent match equal to your contributions and interest if you are retirement-eligible, terminated employment on or after January 1, 2001, and you have at least five years of service credit; otherwise no match is included.
Taxes on Refunds
You will pay taxes when you withdraw you PERA account, either as an ongoing monthly benefit or as a one-time payment if you refund your account. If you refund your account before age 59½, you may also be subject to a federal 10 percent early withdrawal penalty.
Federal Tax Withholding if You Have a Foreign Address
PERA is required by law to withhold 30 percent from any benefit payments or refunds you receive if IRS Form W-9 or IRS Form W-8BEN is not received. If you have questions about your tax status, contact your tax adviser.
IRS links or assistance with completing these forms:
