Separation Benefits

A separation benefit is a lump sum payment of the employee contributions in your retirement account plus accumulated interest. Employee required contributions may have been deducted from your paychecks or paid by your employer as a fringe benefit. Your separation benefit will also include any voluntary additional contributions you have made to your account. You cannot withdraw part of your contributions; a separation benefit will completely close your account. Wisconsin law does not allow you to borrow money from your retirement account.

To be eligible for a separation benefit you must be terminated from all WRS employment and be under age 55 when you apply (age 50 for protective category employees). You cannot be on layoff or a leave of absence. You are also eligible for a separation benefit if you are over age 55 (50) and are not vested in the WRS.

If you are vested in the WRS, or might return to WRS employment at a later date and become vested, you should carefully consider the consequences of taking a separation benefit. You will forfeit the matching employer contributions in your account and all benefit rights earned during your employment, including your years of creditable service. If you take a separation benefit and later return to WRS employment you may be eligible to purchase the service you forfeited, but the cost may be considerably higher than the amount you withdrew. If you purchase your forfeited service you do not recover other benefit rights you forfeited. If you do not roll over your separation benefit payment into another qualified retirement plan or IRA, you may be liable for significant federal and state tax liabilities on a separation benefit.

If you are vested and leave your account in the WRS until reaching age 55 (50 for protective occupation employees), you will be eligible for a retirement benefit based on both employee and employer contributions.

For more detailed information a "Separation Benefits" brochure is available.