For Cities

How Do I…

Help a Member Refund?


After a member has terminated employment with a city that participates in TMRS, he/she may choose to withdraw his/her member deposits. The refund will equal the total member deposits plus earned interest, but not the money that has been contributed by the employing city. The only way to receive the city matching funds is to retire.

The employees status as a vested (see 1) or non-vested employee determines his/her refund options and may affect the decision to request a refund. If you are not sure of the employee's vested status, contact TMRS.

Note: The employee will not receive a refund if he/she begins work with another TMRS city. The funds and service from the original city will be combined with those of the new city for the employee's total retirement benefit.

If the member is vested, member deposits may be left with TMRS until the member is eligible and chooses to retire. The member's deposits continue to earn interest, and the benefit at retirement will include the city matching funds. If the member chooses to request a refund, no city matching funds will be included.

If the member is not vested, terminates employment, and does not go to work for another TMRS city, the member may leave his/her member deposits in the System, where they will earn interest for up to 60 months. After the 60-month period, membership terminates. At any time before the end of the 60-month period, the member can apply for a refund of deposits and interest, but no city matching funds are included, and membership will terminate.

Exception: If the employee is a member of another Texas public retirement system (see 2) he/she may be eligible for retirement under the Proportionate Retirement Program. The employee may combine time in two or more systems to determine retirement eligibility.

To refund an account, fill out the Refund Application Form.

How to Complete the TMRS Refund Application Form

  1. Fill out the top portion of the form:
    • Full Name
    • SSN (must be legible and match the number on file)
    • Mailing Address
  2. Fill out the Public Safety Employee Certification:
    • Answer “Yes” if, when the member separated from the employing city, he/she provided police protection, firefighting services, or emergency medical services in his/her position.
    • Answer “No” if, when the member separated from the employing city, he/she did not provide police protection, firefighting services, or emergency medical services in his/her position.
  3. Fill out the Refund Distribution section, which asks the member to choose a payment method.
    • Check “Direct Payment to Me” if the member wants the entire refund minus 20% federal withholding paid directly to him/her.
    • Check “Direct Rollover to IRA/Employer Plan” if the member wishes to have all or part of his/her refund issued as a direct rollover. The member must submit the Rollover of Refund or PLSD (TMRS-ROLL) form with the Refund Application form.
  4. If the member chooses to roll over, complete the TMRS-ROLL form:
    • Full Name
    • SSN (must be legible and match the number on file)
    • Mailing Address
    • Rollover Amount
    • Account Description
    • Rollover Information
  5. Signature required – be sure the member signs and dates the form(s).(See 3)
  6. An authorized city contact person should certify the date of the last payroll report containing a deposit for the employee in the Employer Certification Section.(See 4)
  7. Send the form to TMRS either by mail or fax.

Note: If the employee has worked for more than one TMRS city, only the last employing city needs to certify the application.


Refund checks are issued weekly; however, it can take up to 6 to 8 weeks to receive a refund because TMRS must wait until we receive and post the city payroll (the final deposit) before processing the refund. Cities submit monthly payroll reports to TMRS before the 16th day of the month after the month of the employee's final retirement deduction.

1
Vesting is a TMRS retirement benefit. Depending on the city plan, an employee is vested after obtaining either 5 or 10 years of service.
2

Statewide Retirement Systems

TMRS
Teacher Retirement System of Texas
Employees Retirement System of Texas
Judicial Retirement System of Texas (Plan 1 or 2)
Texas County & District Retirement System
City of Austin Employees Retirement System
3

Special Tax Notification

Be sure to read the separate page about taxationof the refund and information about direct rollovers before signing the application. The refund is considered taxable income in the year in which it is paid; a member can defer paying income tax by rolling over the funds into an IRA or other eligible plan. The IRS requires TMRS to withhold 20% of a refund unless it is rolled over into a qualified plan. In certain cases, recipients of refund checks may be subject to an additional 10% penalty. See Special Tax Notice Regarding Plan Payments for full information.
4
Important: Be sure the date certified as the final deposit date is correct. This should be the month of the last payroll, e.g. March 2012.