Vesting and Deferred Benefits
Members of CCCERA who have at least five years of retirement service credit are vested in the system. Non-vested means a member has terminated employment before achieving five years of service credit.
The age you may begin receiving a monthly retirement benefit is different for vested and non-vested employees.
Vested members (five or more years of retirement service credit) can begin receiving a monthly benefit at their earliest eligible retirement age (usually age 50). Vested members who terminate employment retain this right if they become deferred members, meaning they leave their contributions and interest in their CCCERA account.
Non-vested members (less than five years of retirement service credit) who defer (do not take a refund when they terminate employment) are not eligible to begin receiving a monthly retirement benefit until age 70. If these deferred members do not begin receiving a retirement benefit by age 70, they must either terminate, and take a lump sum payment of total contributions or begin taking the monthly retirement benefit no later than April 1 following the year in which the member turns 72* years old. This is an IRS minimum distribution rule.
For example, if you started working for a participating employer when you were 33 and at age 40, you left public service and to work in the private sector. You decided to leave your retirement contributions and interest with CCCERA. At this point,
- Your membership with CCCERA becomes deferred.
- You have accrued seven years of service credit, so you are vested.
- Your contributions continue to earn interest as long as your funds remain at CCCERA.
- You are not eligible to retire, since you are not 50 years old.
Basic retirement eligibility for general members hired prior to January 1, 2013, is age 50, with 10 years of retirement service credit.
When you reach age 50, you will be eligible for a monthly retirement allowance, since
- 50 is your first eligible retirement age.
- Your total service credit, plus deferred status period equals at least 10 years.
- Your funds (contributions and interest) have been on deposit at least 10 years.
You do not have to retire at age 50, but you must begin receiving retirement benefits no later than April 1 following the year you turn 72*.
If you defer, your contributions will continue to earn interest until you either take a refund, or begin receiving a monthly benefit. Both vested and non-vested members have the option of leaving their contributions in their CCCERA accounts, should they terminate retirement.
*Distribution of a member’s benefit must begin by the required beginning date, which is the later of the April 1 following the calendar year in which the member attains age 70 ½ or April 1 of the year following the calendar year in which the member terminates. For members attaining age 70 ½ on or after January 1, 2020, distribution of a member’s benefit must begin by the required beginning date, which is the later of the April 1 following the calendar year in which the member attains age 72 or April 1 of the year following the calendar year in which the member terminates. (Setting Every Community Up for Retirement Enhancement Act (SECURE Act), Section 114.)