Leaving your WSPRS position before you retire may have an impact on your benefits. The nature of the impact depends on where you are employed and whether you withdraw your contributions from WSPRS.
If you leave State Patrol employment, you may withdraw your accumulated contributions. This is the only circumstance in which a refund is permitted.
You are not required to withdraw your contributions when you leave State Patrol employment. If you leave your contributions with WSPRS, your funds will continue to accrue interest and your service credit will be preserved for you in the event you return to commissioned service (see “Vesting”).
If you leave a WSPRS-covered position and leave your contributions in the plan, please keep DRS informed of changes in your name, address and beneficiary.
Unless you transfer your withdrawn contributions to another eligible retirement plan, DRS is required to withhold 20 percent for federal taxes. Federal law may also require an additional 10 percent tax be withheld as an early withdrawal penalty if you are under age 50. You can find more information about withholding penalties by reading Withdrawal of Retirement Contributions, a DRS information and application packet that is available on this Web site or from your employer or DRS.
WSPRS is required to report all lump-sum payments to the Internal Revenue Service (IRS). It is your responsibility to account for the withdrawal on your tax return. For more information on this subject, contact the IRS or your tax advisor.
To restore service credit in the plan, you must return to commissioned service within 10 years of the date your employment ended. You must repay the amount withdrawn, plus interest, within five years of returning to service, or before you retire, whichever comes first. Full payment must be received by the statutory deadline date, or your service cannot be restored. No partial restorations are allowed. You can learn more about restoration of service credit by reading the DRS publication WSPRS Recovery of Withdrawn or Optional Service Credit. If you miss the deadline, see “Purchasing service credit” below.
It is still possible to purchase withdrawn or optional service credit after the deadline has passed. The cost for purchasing service credit after the deadline date is considerably more expensive. You can learn more about purchase of service credit by reading the DRS publication WSPRS Recovery of Withdrawn or Optional Service Credit.