If you end employment with the State of Minnesota, you can request a refund of your MSRS retirement contributions. A refund:

  • can be paid to you or rolled to another qualified retirement plan

  • includes your contributions plus interest.

  • does not include employer contributions to your retirement account.

  • forfeits all of your service credit and any rights to an MSRS retirement benefit.

To apply for a refund/rollover

  • Call MSRS at 651-296-2761 or 1-800-657-5757 to request a Refund/Rollover Application.

  • The application cannot be signed and dated until the day after you terminate employment, and must be signed in the presence of a notary.

  • It generally takes about 30 days to process your request.

Tax implications

A refund paid to you is subject to state and federal taxes. You may provide MSRS with tax withholding instructions. If no instructions are provided, the default withholding will apply. You will receive detailed tax information with your refund application.

  • Federal withholding: The default rate is 20%. In addition, if you are under age 59 1/2, you may be subject to a 10% tax penalty (paid when you file your income tax returns). To choose a withholding amount greater than 20%, complete an IRS Form W-4R and submit to MSRS with your refund application.

  • Minnesota withholding: The default rate is 6.25%. To choose an alternate withholding rate (including a specified percentage, dollar amount, or no withholding), complete a Form W-4MNP and submit to MSRS with your refund application.

A rollover to another qualified retirement plan is not subject to the state and federal taxes or early withdrawal penalties.

Repaying a refund

If you return to work and are currently working in a position covered by MSRS or another Minnesota public retirement plan, you may be able to reinstate forfeited service. This can be done by repaying the refund amount plus interest.

Why repay a refund
Repaying of a refund will restore your service credit, which may increase the monthly payment you receive in retirement.

How to reinstate forfeited service
Contact the retirement plan from which you received the refund to discuss the repayment amount  and the impact it will have on your monthly retirement benefit.