SBCERA Cover Story

Autumn has arrived and with it comes a time of paradox. The season often brings mixed emotions of both peace and melancholy, an appreciation of the things we have and a desire for all things new. As you enjoy the charm of autumn’s visible changes, some of you may begin to plan changes in your own life such as finding a new job, moving away to be closer to family, or a new adventure like retirement. Of course, with big life changes come very practical questions about money, and it is worth considering how a major change might impact your retirement benefit.

What if I change jobs?

When you change jobs within or among SBCERA-covered employers, your membership in SBCERA is unaltered. You continue to earn service credit just as you did while working at your previous job. However, if you go to work for an employer that is not with SBCERA, your retirement picture becomes a bit more complex and you must choose from the following options:

  • Reciprocity: If your new job comes with participation in a California-based public pension, such as CalPERS or another county retirement system, you may be able to establish reciprocity, whereby you keep your funds on deposit and link your participation in SBCERA with the new retirement system for continuous service credit and preservation of total retirement benefits.
  • Service Retirement: You may already be eligible to retire from SBCERA! In some cases, members who change jobs and are able to establish reciprocity instead opt for a Service Retirement from SBCERA, whereby they begin collecting a lifetime monthly benefit and then accrue entirely separate benefits with their new retirement system.
  • Refund or Rollover: Alternatively, after leaving a position with an SBCERA-covered employer, you can refund or rollover any refundable contributions. A refund revokes any possible benefits from SBCERA and is subject to taxes as personal income, whereas a rollover to a qualified plan such as an IRA, is not.
  • Deferred Retirement: If you are a Vested Member of SBCERA, you can choose to leave your contributions on deposit until such time that you are eligible and ready to service retire and collect your lifetime monthly benefit.
  • Leaving Funds on Deposit: Of course, regardless of whether or not you are vested, you can always leave your funds on deposit with SBCERA and make a decision at a later time. Your refundable contributions continue to earn interest.

What if I move to another state?

If you move to another state and change jobs, you will not be able to establish reciprocity between SBCERA and your next retirement system, even if it is a public pension system. However, with the exception of reciprocity, the bulleted options above may be available to you.

What if I am already retired?

For Retired Members of SBCERA, if you establish primary residence in another state, you will continue to receive your lifetime monthly benefit. However, be sure to provide updated address, contact, and banking information to SBCERA. Should you move out of state, SBCERA will be able to continue withholding federal income taxes from your benefit if you so choose, but because we are only able to withhold state income taxes for California, you will be responsible for paying state income tax (if applicable) to your new state of residence.

From all of us at SBCERA, we wish you a colorful autumn full of new memories with loved ones. Whether you find yourself continuing along your current path or preparing for a new season of life, SBCERA will steadfastly serve to provide the retirement benefits you have earned and are eligible to receive.