Requesting a Refund - TRS

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years while absent from TRS-covered employmentand then later apply for a refund if you do notreturn to employment in a TRS-covered position.The interest rate is currently 5 percent but will bereduced to 2 percent effective Sept. 1, 2014.Note: If you have less than five years of servicecredit, after five consecutive years without earning TRSservice credit your membership is terminated unlessyou qualify for an exception or return to work in a TRScoveredposition.• If you have at least five years of TRS servicecredit you may leave your accumulated contributionswith TRS and earn interest as long as thesefunds remain with TRS. The interest rate is currently5 percent but will be reduced to 2 percent effectiveSept. 1, 2014. When you meet applicableage requirements you may apply for a retirementannuity based upon your service and salary historyon file with TRS at the time your employment terminated.• You may terminate your membership in TRSby applying for a refund and withdrawing youraccount. You may use the accumulated contributionsless any required withholding for federalincome tax for any purpose. See “Federal IncomeTax Implications” for more information. If you terminateTRS membership and receive a refund ofyour accumulated contributions, you will terminateall service credit with TRS and forfeit valuable2
future benefits associated with the service creditsuch as eligibility for a retirement annuity, deathbenefits, and retiree health insurance.• You may terminate TRS membership byapplying for a refund and withdrawing youraccount, but defer receipt of taxable income byrolling your funds over to another qualified plan ortraditional Individual Retirement Account (IRA). See"Federal Income Tax Implications" below for moreinformation.Federal IncomeTax ImplicationsRefunded amounts that represent tax-sheltered contributionsare subject to a mandatory 20 percent federalincome tax withholding unless you elect to roll overall eligible amounts to another qualified plan or to a traditionalIndividual Retirement Account (IRA). A 10 percentearly withdrawal penalty assessed by the InternalRevenue Service (IRS) may also be applicable.All or a portion of your refund that is eligible for rollovermay be rolled over. For more information regardingamounts in your TRS account that are eligible for rolloverand types of accounts eligible to receive rolled overamounts, see Special Tax Notice Regarding Your RolloverOptions Under the Teacher Retirement System of Texasattached to the Application for Refund form (TRS 6).3
Page 1: Requestinga RefundAPRIL 2014
Page 6 and 7: If you elect to roll over any eligi
Page 8 and 9: *Note: Not all service credit may b
Page 10 and 11: STEP 4Send the completed applicatio
Page 12 and 13: This means that TRS not only must r
Page 14 and 15: For a complete statement of the law
Page 16 and 17: tributions you have made to purchas
Page 18 and 19: issued, TRS must receive your compl
Page 20: 1000 Red River StreetAustin, Texas

Requesting a Refund - TRS

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