Leaving State Employment

Important!

Read this information and the plan booklets carefully before making decisions that affect your benefits.

When leaving State of Alaska employment, you must make several important decisions about your contributions to the retirement system, investments, medical coverage, and life insurance.

Although this information covers the plans as they exist today, you should always contact your Human Resources Office or the Division of Retirement and Benefits for complete and up-to-date information.

If you are a Tier III member of the TRS Defined Contribution Retirement (DCR) Plan:


TRS Defined Benefit Plan (Tier I or II)

When you leave state employment and are participating in the Teachers’ Retirement System (TRS), you may choose to retire (if eligible), leave your contributions in the TRS, or refund your contributions.

  • If you are retiring, contact the division’s Retirement Customer Service Center at (800) 821-2251 (between 10 a.m. - 3:30 p.m.) at least 90 days in advance of your planned retirement date to obtain the required forms and information. Make sure you are eligible to retire before you terminate employment.
  • You may terminate and receive a retirement benefit when you reach retirement age if you are vested. (Vested means having at least eight paid-up years of creditable TRS service or twelve paid up years of combination of full- and part-time service. You must have worked at least 172 days and have one-half year of membership service as a full-time teacher in each of the twelve school years). You must leave your contributions in the system to receive a retirement benefit.
  • You may refund your TRS account after being terminated from employment for at least 60 days.

Warning: If you refund your TRS account, you will not be able to reinstate your service and you will forfeit your tier if you return to TRS employment.

Retirement Eligibility

To receive TRS monthly retirement benefits, you must meet certain age and service requirements. If you first entered TRS employment:

  • Before July 1, 1990 (Tier I), you may retire at age 55 for normal or age 50 for early retirement; or
  • After June 30, 1990 (Tier II), retire at age 60 for normal or age 55 for early retirement.

You may retire at any age with full benefits if you have at least:

  • 20 paid-up years of TRS membership service, or
  • 25 years of paid-up credited service, or
  • 20 full school years of combined part-time and full-time service.

You may retire with two paid-up years of TRS service if you are vested in the Public Employees’ Retirement System (PERS) and are eligible for retirement. You may retire with one paid-up year of TRS membership service if you are retired from the PERS.

If you are not vested in either the PERS or the TRS, you may be able to combine your PERS and TRS service under the public service benefit provision in the TRS. You must have a minimum combined total of five years service, with a minimum of two years in the TRS. Please contact the Division to find out if this provision applies to you and what the costs will be.

It does not pay to delay! Once you are eligible for a normal retirement benefit, you will not receive a higher TRS benefit if you have stopped working in a TRS position and delay receiving a retirement benefit until after your normal retirement age. See Retirement Benefits, Death Benefits, and Insurance in the TRS Information Handbook for details.

Warning: If you have earned a full year of TRS credit (172 days) during your last school year, you are not eligible to retire until the beginning of the following school year (July 1) regardless of when you terminate TRS employment.

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Retirement Medical Benefits

While you are receiving monthly retirement benefits, you may be eligible for system-paid AlaskaCare medical benefits. If you are not eligible for system-paid benefits, you may choose to purchase coverage.

The State of Alaska retirement systems provide extensive and valuable benefits for you and your family including hospitalization, medical, surgical, maternity care, and other services necessary for the diagnosis and treatment of an injury or disease.

Your health care coverage is good worldwide. These benefits may change from time to time. Contact the Division of Retirement and Benefits for the most current information and to determine your eligibility.

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Decisions Regarding Your Contribution Account

If you are not eligible to retire from the TRS, you have choices to make regarding your contribution account. You can:

  • leave your contributions in the system and retain your benefit tier in anticipation of future work with the Alaska TRS; or
  • refund your contributions

Leaving Your Contributions in TRS

If you are not retiring, you may choose to leave your contributions in your TRS account when you leave state employment. To maintain rights to TRS benefits, inactive (terminated) TRS members must apply for a refund or benefit before July 1 following their 75th birthday or within 50 years of the last active date of TRS membership. It is very important to notify the division about changes to your address and the address of your beneficiary.

TRS Refunds

You may refund your TRS contribution account at any time after being terminated from employment for at least 60 days. A refund from your TRS Defined Benefit account can be paid as a lump sum payment to the participant or as a direct transfer/rollover to a qualified plan. The refund can be made in combination of the two forms of distribution, but the distribution amount must equal 100%. To request a refund, you must complete a Refund Election form (gen008).

Your employee contribution account includes:

  1. your mandatory contributions;
  2. any indebtedness principal and interest payments; and
  3. interest earned.

A refund of contributions does not include the employer contributions that have been made or the investment income earned.

If you are married, a notarized consent from your spouse on the Refund Election form (gen008) is required if you are vested and want to receive a refund of your contributions. (Some exceptions may apply).

Warning: If you refund, you forfeit all your retirement benefits, including your retirement benefits, including tier status, future pension, and medical coverage.

If you are vested and die before retiring, your spouse may receive a monthly survivor benefit if you have not refunded your contributions.

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Leaving State Employment Because of Disability

If you are terminating your employment because of disability, your application for disability benefits must be either received by the division or postmarked within 90 days after termination of employment. For an application packet or for more information, contact the Disability/Appeals Unit.

Caution: If you refund your contribution account instead of applying for a disability benefit, you are no longer eligible for that benefit or any future TRS retirement benefit or associated system-paid AlaskaCare medical insurance benefits.

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Returning to TRS Employment

If you return to TRS employment in a TRS-covered position with a TRS employer, and have taken a refund, prior service cannot be reestablished and your former tier benefit status will be forfeited.

If you are retiring from state employment, you may return to work in any non-TRS participating position without limitations.

You may also work in a temporary, nonpermanent TRS position or on a personal services contract without affecting your retirement benefits.

When you return to work in a permanent position after an early retirement, you can only choose the Standard Option. Under the Standard Option your retirement benefit will be suspended until you terminate employment. TRS contributions will be deducted and you will accrue TRS service.

Caution: There are some restrictions for those who retired under a RIP.

For more information, read your Information Handbook, the TRS brochure, Working After Retirement, or contact the division.

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Repaying Refunds or Indebtedness

Under certain circumstances, you may repay a claimed service indebtedness through pretax transfers from your Alaska Supplemental Annuity or Deferred Compensation Plan. You may also transfer a pretax payment from other qualifying plans. This option is available upon termination or while you are still in-service. It is not available if you are retired. Contact the division’s Retirement Customer Service Center for specific information.

The option to use pretax payroll deductions to purchase a reinstatement indebtedness (prior refunded service) ended on July 1, 2010.

You may also repay an indebtedness with after-tax payments to the TRS.

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TRS Defined Contribution Retirement Plan (Tier IV)

You are first eligible to receive payment of your TRS Defined Contribution Retirement (DCR) Plan account when you have been terminated for at least 60 days, provided that you are not rehired by a participating employer before 60 days have passed.

If you have completed a Distribution/Direct Rollover Request to receive payment of your account, Great-West Retirement Services (GWRS) will verify you are eligible to receive payment and set up the final payment instructions after 60 days have passed. Partial account payments will be allowed, up to two per year, after the 60-day termination requirement has been met.

You are not required to complete a Distribution/Direct Rollover Request unless you are planning to refund your account. After you terminate, you may defer payment of your account for any length of time until April 1 of the year after you turn 70-1/2; however payments must begin no later than April 1 of the year after you turn 70-1/2. The balance of your account will continue to change in value depending on market conditions.

Important information about payments and taxes is included as part of the instructions to the Distribution/Direct Rollover Request form. If you have questions, contact GWRS at (800) 232-0859.

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Unused Sick Leave Credit

If you change employment from the Department of Education and Early Development to a school district, or from one school district to another and your service is continuous, you may transfer all of the cumulative sick leave to the new employer. It is the responsibility of the employee to notify the new employer, within 90 days of commencing work, of the number of days to be transferred.

If you have worked for the University of Alaska, you will need to file a separate claim form with the Division of Retirement and Benefits for that service. The University neither accepts nor transfers unused sick leave.

When you retire, you may receive additional TRS credit by claiming your unused sick leave. Only full days of sick leave are credited towards your retirement. Your claim for unused sick leave must be verified by your last employer and a claim form must be received by the TRS no later than one year after you are appointed to retirement. It is your responsibility to ensure that this form is completed and returned to the Division of Retirement and Benefits.

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Alaska Deferred Compensation Plan

If you have participated in the Alaska Deferred Compensation Plan (DCP), your normal monthly contribution will not be withheld from your termination paycheck unless you request it.

You may request up to the maximum allowable amount to be withheld and placed into your DCP from your terminal leave amount. The amount of terminal leave allowed to be deferred will depend on your particular situation. Terminal leave deferral must be requested no later than the month prior to leaving state employment.

You are eligible to receive payment of your DCP account after you terminate. You are not required to complete a DCP Distribution/Direct Rollover Request form unless you wish to receive payment.

If you do not want to receive payment of your DCP account, you may defer payment until April 1 of the calendar year following the year you attain age 70½.

Important information about payments and taxes is included as part of the instructions to the Distribution/Direct Rollover Request form. If you have questions, contact GWRS at (800) 232-0859.

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Tax Sheltered Annuities

If you are participating in a tax sheltered annuity or investment program, you will need to contact your annuity broker to notify them of your employment changes. Contact your Human Resources office if you have any questions.

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Taxes and Your Benefits

Refunds are subject to state and federal taxes or penalties. Please see the TRS Information Handbook (Defined Benefit) or the Distribution/Direct Rollover Request forms for additional information on taxes. Division employees do not give tax advice. You are encouraged to contact a tax expert for advice about how a contribution refund will affect you.

Twenty percent (20%) will be withheld for federal income tax on:

  1. Lump sum payments paid directly to participants, and
  2. Monthly payment for the five-year certain annuity option

The 20% withholding does not apply to lump sum payments transferred plan-to-plan into other qualified plans. (Deferred Compensation funds transferred into another plan take on the rules for that new plan.)

The federal government may also impose a tax penalty of 10% of distribution amounts, in addition to regular taxes due, when plan accounts are withdrawn before age 59-1/2 under the lump sum payments and five, ten, or fifteen-year certain annuity options. (This 10% does not apply to the Deferred Compensation Plan.)

There may be exceptions allowed by the federal government. Contact the Internal Revenue Service or a tax expert for details before paying the penalty.

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Medical Coverage

Medical coverage and participation in the Health Flexible Spending Account (HFSA) ends on the last day of the month in which you terminate (or are last in pay status, whichever is earlier). You may submit claims for services incurred prior to coverage termination.

Information about continuing health coverage, the plans and premiums is available from your human resources office or this Web site.

If you are covered by the AlaskaCare plan at the time of your termination, you may purchase health and HFSA coverage after you terminate employment. You are eligible to continue the same or less coverage you had at the time of termination.

If you are covered by a Union Trust Health Plan at the time of your termination, contact your union health trust for information regarding health care coverage.

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Life Insurance

Life insurance ends on the last day of the month in which you terminate (or are last in pay status, whichever is earlier). If you wish to continue your life insurance coverage after retirement, you must apply for it on your application for retirement benefits before you are appointed to a retirement benefit.

You may convert your Optional, Select or SBS Life Insurance coverage to a private policy with the life insurance carrier. Coverage will be a whole life policy and the premiums will be substantially different from the rate you are currently paying.

To convert to a private policy, you must complete a conversion form and pay the required premiums. Your conversion form must be received by the life insurance carrier within 31 days of the date your life insurance terminates.

Contact the Benefits Section at (907) 465-8600 for the required forms and premiums.

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Beneficiary Designations

Please review your beneficiary designations periodically and make any necessary changes. Many people forget to update their designations when they marry, divorce, their spouse dies, or a beneficiary's address changes. Contact the Division of Retirement and Benefits if you need to change your designations for the:

  • Teachers' Retirement System (tRS) Tier I/II Defined Benefit Plan

Contact GWRS for the:

  • Alaska Deferred Compensation Plan (DCP)
  • TRS Tier III DCR Plan

A separate designation form is required for each benefit.

Beneficiary designations on file at the time of death determine the payout, not your will.

It is important to keep your beneficiary designations and beneficiary addresses up to date. Beneficiary forms »

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Address Changes

Prior to leaving state service, contact your Human Resources Office to change your address in the state payroll system.

After you terminate, if you have money in the TRS and/or DCP, you must notify each plan to change your address. For the TRS, you must notify the Division of Retirement and Benefits. For the DCP you must notify GWRS.

You may change your address by sending written, signed requests with your Retirement Identification number (RIN) or the last four digits of your Social Security number to the division’s Juneau office for the TRS and to GWRS for the DCP.

Always keep your address current so you will receive important information regarding your benefits.

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Forms Reminder

You may be required to complete (or provide) the following forms when you leave state employment:

Refund Election Tier I/II
To receive a refund of your TRS contributions, you must complete and submit this form to the division. It will take about 70 days to issue the refund check. You must be terminated for at least 60 days and it takes an additional 10 days to complete the refund process.
Refund Election form (gen008) [PDF]
TRS Defined Contribution Retirement Plan (Tier III) Distribution/Direct Rollover Request
To receive payment of your TRS DCR account, you must complete and return this form to GWRS. You may elect to receive payment of your annuity account now or defer payment until a later date.
TRS Distribution/Direct Rollover Request form [PDF]
DCP Distribution/Direct Rollover Request
To receive payment of your DCP account, you must complete and return this form to GWRS. You may elect to receive payment of your account now or defer payment until a later date.
DCP Distribution/Direct Rollover Request form [PDF]
Claim and Verfication of Unused Sick Leave Credit (trs021) (Tier I/II)
If you are retiring, please have your employer verify the number of unused sick leave days, and submit the completed form to the Division no later than one year from your retirement effective date. If you are transferring to a school district, please contact your new employer within 90 days for information on transferring your unused sick leave.
Claim and Verification of Unused Sick Leave Credit [PDF]
Health Continuation Enrollment
If you are covered by the state health plan and wish to purchase continued health and HFSA coverage, your enrollment form must be received by the claim administrator within 60 days of your termination.
Life Conversion Application
To convert your Optional, Select or SBS Life Insurance coverage to a private policy, your form must be received by the life insurance carrier within 31 days of the date your life insurance terminates.
Evidence of Birth Date
You must provide a copy of your birth certificate or driver’s license if you are selecting a single-life or joint and survivor annuity under the SBS-AP or DCP. A copy of your spouse’s birth certificate or driver’s license is also required if you select a joint and survivor annuity.
Divorce or Dissolution of Marriage
If you were married while working in any TRS-covered position and have subsequently divorced, you will need to submit court-certified copies of your decree or property settlement if you are electing a refund of contributions.

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Writing the Division

Print your full name, address, and telephone number on your letter. Be sure to include your Retirement Identification number (RIN) or the last four digits of your Social Security number and sign and date any request for information or action. Division mailing address:

  • Department of Administration
  • Division of Retirement and Benefits
  • P.O. Box 110203, Juneau, AK 99811-0203

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Calling the Division

When calling the division, please tell the receptionist why you are calling and have your Retirement Identification Number (RIN) or the last four digits of your Social Security number ready. You will be transferred to the appropriate section.

Our Customer Service Center phone hours of operation are 10 a.m. - 3:30 p.m. Alaska time.

  • Toll-free: (800) 821-2251
  • In Juneau: (907) 465-4460
  • FAX: (907) 465-3086
  • TDD for the hearing impaired: (907) 465-2805

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Visiting the Division

If you are planning to visit the division, please call ahead for an appointment. This saves valuable time and allows us to review your records and prepare for your visit.

The office is open Monday through Friday between 8 a.m. and 5 p.m., with limited staff working in Juneau during the noon hour and from 4:30 to 5 p.m.

  • Main Office Location
  • 6th floor, State Office Building
  • 333 Willoughby Avenue, Juneau
  • Anchorage Field Office (by appointment only)
  • 550 West 7th, Ste 1690, Anchorage

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Email Contacts

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Checklist Reminder

Be sure to check the status of your:

  • TRS Contributions
  • Unused Sick Leave
  • Alaska Deferred Compensation Plan
  • Tax Sheltered Annuities
  • Indebtedness
  • Life Insurance
  • Medical Insurance
  • Beneficiaries
  • Address Changes
  • Required Forms
  • Option to convert to Defined Contribution Retirement Plan (nonvested members only)

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Revised May 2012