Termination of Employment, Withdrawal of Account Balance or Felony

Termination of Employment

If you permanently terminate your employment prior to becoming eligible for retirement, you may either leave your funds on deposit with TRS or withdraw your accumulated balance. Withdrawal of funds cancels TRS membership and voids any future benefit eligibility.

Refunds or Withdrawal of Account Balance

A refund would consist of your contributions, plus any accumulated interest, less any statutory required contributions to the medical insurance fund. Refunds can be made 60 days after your termination date.

Members eligible for service retirement, by age or years of service, may not refund their account balance unless it prohibits them from qualifying for a Social Security benefit or obtaining credit in another publicly funded retirement system.

Your refund may be subject to an IRS early withdrawal penalty if you are under age 59 ½, unless you transfer or roll over your refund to another eligible plan. If the refund is paid directly to you, there are federal deadlines by which you must roll your refund into another eligible plan to avoid the IRS early withdrawal penalty.

If you are contemplating a refund of your account balance, you should contact TRS for more details at 800-618-1687, between 8 a.m. and 5 p.m. ET, Monday through Friday.

 Reinstatement of Withdrawn Account

Members, who choose to withdraw their TRS account, and later return to a TRS-covered position and earn contributing service equal to one (1) year, may reinstate their withdrawn account. After the account is reinstated, their membership status is the same as if the account had never been withdrawn.

Conviction of a Felony Related to TRS Employment

The 2002 General Assembly amended KRS 161.470(5) to provide that “persons hired on or after August 1, 2002” who are convicted of “a felony related to his employment” shall forfeit retirement benefits and shall be entitled, instead, only to a return of his or her retirement contributions with any accumulated interest. Forfeiture of retirement benefits shall be stayed pending any appeal of such a conviction. You should notify the retirement system should you experience such an event.