Members who leave APD as a cadet or a commissioned officer will be required to fill out a Designation of Retirement Deposits form electing an option to receive retirement contributions and where to send them. The form can be obtained here.
Members who have separated employment will have the following options (please see the Designation of Retirement Deposits form for more details):
- Take a direct refund of the contributions (minus Federal Income Tax)
- Rollover the contributions to an I.R.S. qualified retirement plan
- Declare Vested Status (if 10 years of service or more)
- Declare Proportionate Retirement program status if previously employed or will be employed in another Texas proportionate retirement system.
Members have certain responsibilities if they keep their APRS membership after termination. First, they are solely responsible for timely and properly applying for benefits. Also, members are responsible for notifying APRS of their proportionate time in another Texas retirement system which participates in the Proportionate Retirement Program and keeping that information current. Members are also responsible for maintaining current contact information and beneficiary designations with APRS.
As an active member, can I withdraw all or a part of my contributions in order to pay off debts, fund medical expenses or pay for my children's education?
No. APRS is a tax-qualified “defined benefit” plan under Section 401(a) of the Internal Revenue Code. State and Federal laws do not allow members to make a partial withdrawal of deposits or to receive loans from the System. Only members who have separated employment from APD can receive a distribution from APRS. If a member is required to make payments pursuant to a divorce, QDRO or child-support agreement no funds can be withdrawn from APRS to satisfy these claims unless the member separates service with APD. Finally, a member also cannot receive all or a portion of their contributions to pay for a medical emergency or for a college education without terminating service. Other types of retirement plans such as 457 plans and 401(k) plans differ from APRS and have different sets of rules and regulations applicable to them.
How do I know if I am a vested member?
When a member has attained 10 (ten) years of creditable service, they become a vested member of the retirement system.
This means that the member has a right to receive a monthly annuity when they reach retirement eligibility. Even if the member terminates employment before reaching eligibility, if they are vested, they can decide to leave their contributions in the system and begin drawing their annuity when you reach age 62, or when they meet other age and service requirements for retirement eligibility.
It is important to note that, although retirement contributions for inactive members draw interest, the inactive member's multiplier can increase during the years between the member's termination and retirement, but no cost of living increases are applied.
I have terminated my employment with the Austin Police Department, how do I go about receiving a refund?
When a member leaves the City as a cadet or a commissioned officer, they should complete a Designation of Retirement Deposits Form indicating their election. Their choices will be:
- Refund. Receive a refund of the member's contributions upon termination of employment. A retirement contribution refund will be issued approximately two weeks after the final employment check from APD is issued. Federal Income Tax will be withheld on all untaxed contributions and interest at 20% of the total taxable amount. If the member is vested, they may choose to leave their deposits in the System through the end of the calendar year. If interest is granted, they will receive interest on their deposits (interest is only credited to vested member accounts), and their refund will be issued in January. The Board of Trustees annually determines the amount of interest paid on vested members’ accumulated deposits (if any). Retirement interest is accrued on the last day of the calendar year based on the amount that the member had in the System on the first day of that calendar year. Their money must remain on deposit for the entire calendar year in order to accrue interest.
- Rollover. A member may have their contributions transferred to an I.R.S. qualified retirement plan through a direct rollover by providing a letter of acceptance from the rollover intuition to the System with their refund form. (Federal Income Tax will not be withheld but the monies will be made payable and moved to the qualified retirement plan on the member's behalf).
- Declare Vested Status. If a member has ten or more credit service years, they can choose to take advantage of their vested right to an annuity when they reach retirement eligibility. If the member indicates that they want to remain vested, their contributions will remain in the System until they reach retirement eligibility and contact the System to apply for retirement benefits. Their contributions will continue to earn interest until their monthly annuity begins. Should they choose vesting, their benefits will be based on the eligibility in effect at the time they terminated employment. The member will receive the current multiplier but no cost of living increases will be applied to their benefits after they leave employment and before the date the member's annuity payments begin.
- Declare Proportionate Service. A member may choose to retain their deposits in the System if they are eligible or expect to become eligible to participate in the Proportionate Retirement Program. To qualify, the member must be or become a member of one of the participating retirement systems under the statewide Proportionate Retirement Program and that membership must be verified by the participating system.
When I receive a refund of contributions why do I not receive any of the City contributions?
Contributions made by the City of Austin remain with the System as required by applicable laws.
When will my refund be issued to me?
With a member's final paycheck, one final contribution will be made to the System. After that check is issued, the exact amount of the member's total refund can be determined. A retirement contribution refund can be issued as soon as two weeks after the final employment check from APD is issued.
How long do I have to decide which refund option I am choosing?
Non-vested members of the System must request a refund of their deposits by the seventh (7th) anniversary of their separation date unless they have declared their status as a Proportionate Retirement Program Member. Failure to request the refund will result in the permanent forfeiture of their deposits and creditable service with the System. Non-vested members who attain age 72 (or age 70½ if attained age 70 ½ prior to December 31, 2019) if prior to separation or prior to the seventh (7th) anniversary date of separation who have not requested a refund of their deposits will forfeit their deposits and creditable service with the System if the refund is not requested within ninety (90) days after the System notifies the member of the need to refund their deposits.