Withdrawing Funds

Is is possible to withdraw a portion of our annuity?

No. MOSERS is a non-contributory defined benefit (DB) plan for members hired before January 1, 2011. As such a member, your employer pays the necessary contributions to MOSERS while you are actively employed so that you may receive a future monthly retirement benefit and potential survivor benefits. Since you do not pay contributions, you are not eligible to withdraw funds from the retirement system.

Members employed in a MOSERS-covered position for the first time on or after January 1, 2011 are required to contribute 4% of their gross salary to help fund the retirement system. Those members, if they leave state employment, have the option of requesting a refund of the contributions they have made to MOSERS plus any interest on their contributions – if they do so prior to reaching normal retirement eligibility. Any member who receives a refund will forfeit service credit and the right to receive any future retirement benefits from MOSERS.

Any refund of contributions taken as cash (as opposed to rolling it over to MO Deferred Comp, a traditional IRA, or other qualified retirement plan) is considered taxable income for the year you receive it. MOSERS is required to withhold 20% for federal taxes on such a refund. If you receive a cash payment before you reach age 59½ and do not roll it over, you may have to pay an IRS a penalty equal to 10% of the taxable portion of the payment in addition to the regular income tax. See our Special Tax Notice for more information.

The IRS does not currently allow pension plans to offer lump-sum payouts to current retirees in exchange for reduced future benefit payments. MOSERS did offer a buyout program which enabled eligible members to accept a lump-sum payment in lieu of all future annuity payments. However, this program was not available to members who had already begun receiving monthly benefits.