Leaving your current LEOFF position before you retire will impact your benefits. The nature of the impact depends on where you are employed next and whether you withdraw your contributions from LEOFF.
If you leave employment as a fire fighter or law enforcement officer in Washington State, you may withdraw your accumulated contributions. If you have 10 or more years of LEOFF service credit, you may withdraw 150 percent of your accumulated contributions.
You are not required to withdraw your contributions when you leave covered employment. If you leave your contributions with LEOFF, your funds will continue to accrue interest and your service credit will be preserved for you in the event you return to employment as a law enforcement officer or fire fighter. See “Vesting.”
If you leave a LEOFF position and decide to keep your contributions in the plan, please inform DRS of changes in your name, address and/or beneficiary.
Unless you transfer your withdrawn contributions to another eligible retirement plan, DRS is required to withhold 20 percent of the tax-deferred portion for federal taxes. The Internal Revenue Service (IRS) may withhold an additional 10 percent if you are under age 50. For more information about withholding penalties, refer to Withdrawal of Retirement Contributions, which is also available from your employer.
DRS is required to report all lump sum payments and withdrawals to the IRS. It is your responsibility to account for it on your tax return. For more information, contact the IRS or your tax advisor.
To restore service credit, you must return to covered employment. You must repay the amount withdrawn, plus interest, within five years of returning to service, or before you retire — whichever comes first.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 this deadline or your service cannot be restored. No partial restorations are allowed. Learn more about restoring service credit in the DRS brochure, Plan 2 Recovery of Withdrawn or Optional Service Credit. If you miss the deadline, see “Purchasing service credit” below.
You may be able to purchase withdrawn or optional service credit after the deadline has passed, though it’s considerably more expensive. Learn more by reading Plan 2 Recovery of Withdrawn or Optional Service Credit.
If your next job is in a LEOFF position, your membership and service credit will continue. Your employer will ask you to fill out a new enrollment form.