Richmond VA > Retirement > General > Plans > Defined Benefit > Refund of Contributions

Last Updated: 2013-02-21

Defined Benefit Plan Refund of Contributions Fact Sheet

Eligibility for a Refund

To be eligible for a refund of Defined Benefit Plan contributions, you must meet one of the following criteria:

  • A former non-vested member (less than five years of service) of the Richmond Retirement System (RRS)
  • A beneficiary of a deceased vested member of the RRS who was not eligible for retirement
  • A beneficiary of a deceased vested member of the RRS, eligible for retirement with no spouse
  • A beneficiary of a deceased retiree or a designated survivor whose contributions were not paid back in full through receipt of his/her monthly pension

Payment Information

A notarized Request for Refund of Defined Benefit Plan Contributions form must be completed and returned to the Richmond Retirement System. Refund requests received by the 15th of the month will be paid on the last working day of that month. Forms received after the 15th will be paid on the last working day of the following month. All refunds are paid by check.

NOTE: Refund requests will not be processed until the RRS receives official notification of the member's separation from the city or a participating employer.

Disbursement Options

You must elect to receive your refund by one of the following two options:

  • Lump-Sum Distribution paid to you
  • Direct Rollover to a qualified plan

We recommend that you review the Special Tax Notice Regarding Plan Payments and/or consult with a professional tax advisor prior to making your election.

Lump Sum Distribution

If you choose a lump-sum distribution paid to you, you will receive 80% of the taxable amount of the payment. The RRS is required to withhold 20% of that amount and send it to the Internal Revenue Service (IRS) as income tax withholding to be credited against your taxes.

An additional 4% may be withheld to send to the Virginia Department of Taxation.

If you receive the payment before age 59 1/2, you may have to pay an additional 10% to the IRS, upon filing your federal tax return.

Direct Rollover

If you choose a direct rollover, your refund will not be taxed in the current year and no income tax will be withheld. Your direct rollover must be to an eligible retirement plan as defined in Section 401(a), 401(k), 403(b) or 457 of the IRS Code, a traditional individual retirement account (IRA) or an individual retirement annuity.

Tax Reporting

Should your death occur prior to a refund being paid, your contribution account will be paid to your designated beneficiary on file with the RRS. The designated beneficiary will have the same distribution options cited above.

Death of a Terminated Member

Should your death occur prior to a refund being paid, your contribution account will be paid to your designated beneficiary on file with the RRS. The designated beneficiary will have the same distribution options cited above.

No Named Beneficiary

In the event there is no named beneficiary on file in our office, the refund will be paid to the first person qualifying based on the following order of precedence in accordance with the Code of the city of Richmond.

  1. To a spouse
  2. If no surviving spouse, to the children and descendants of deceased children, per stirpes
  3. If none of the above, to the parents equally or to the surviving parent
  4. If none of the above, to the duly appointed executor or administrator of the estate
  5. If none of the above, to other next of kin entitled under the law of the State of Virginia

Contact Information:

Richmond Retirement System
City of Richmond
730 E. Broad Street, Suite 900
Richmond, VA
23219 USA
Retirement
Phone: (804)646-5958
Fax: (804)646-5299

Toll-Free (Outside Central Virginia): (888)288-2781
Office Hours: By Appointment Only
Monday - Friday
8:00 a.m. - 5:00 p.m.
Walk-in Visits:
Monday - Friday
10:00 a.m. - 12:00 p.m.
and 1:00 p.m. - 3:00 p.m.

More Contact Information

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