IPERS members and their employers each contribute money to IPERS each month. Members contribute a small amount directly from their paycheck. These contributions are pooled and invested to pay for future retirement benefits. At retirement, your benefit is calculated based on your average salary and years of service. The longer you work in public service, the larger your retirement benefit.

No matter when you leave IPERS-covered employment, you are always entitled to 100 percent of your own contributions and interest earnings. If you are vested, you can receive a portion of your employer’s investment based on your years of service. 

Weigh Your Options

Option 1: Leaving Funds with IPERS

If you leave IPERS-covered employment before you retire, you may leave your money in IPERS until you are ready to retire. Or you may:

• Roll your money over to another qualified retirement plan. 
• Take a refund. 

If you leave your money with IPERS, it will continue to earn interest. Make sure to keep your contact information up-to-date so we can reach you, as necessary, with important information about your benefits. 

Option 2: Take a Refund

When you take a refund, you end your membership in IPERS. This isn’t always in your best interest. IPERS recommends you contact us before you apply for a refund. We can help you understand all your options.

Rollovers
There are two ways to make a rollover. You can:

• Have IPERS transfer the refund money directly to another qualified retirement plan.  
• Send your refund to another retirement plan yourself.

If you make a direct rollover, you can avoid mandatory income tax withholdings, defer income tax liability, and, if applicable, avoid a 10% early-distribution tax. 

Lump-Sum Distributions 
Generally, all taxable amounts paid in a lump sum are subject to a mandatory 20% federal withholding tax if they are not directly rolled over to an eligible retirement plan. If you are an Iowa resident, you will be subject to a 5% withholding on the taxable portion, unless you qualify for an exemption or complete a direct rollover to an eligible retirement plan. The IPERS refund application contains further details about the Iowa exemption.