Refunding Your Account

Refund Information

If you terminate your employment with a New Mexico Educational Retirement Board(NMERB)-covered employer/employers prior to retirement, you have the option to leave your contributions with NMERB. If you are vested with NMERB you are eligible for a lifetime retirement once you meet retirement eligibility requirements. Whether you are vested or not, if you leave your contributions with NMERB and return to an NMERB affiliated employer/employers in the future, you will retain your service credit and Tier status. There is no paperwork required to leave your contributions on account.

You may request a withdrawal or rollover of your member contributions. Please be aware if you refund or rollover your contributions, you will be forfeiting your service credit and any retirement benefit. You are not entitled to any contributions made by your employer.. If you return to an NMERB affiliated employer/employers in the future, you will start with a zero balance of service credit and contributions. You will be subject to the current Tier status and retirement eligibility requirements that are in effect at the time of your new employment date.

You must be fully terminated from all NMERB affiliated employers to request a refund of your contributions. If you choose to withdraw or rollover your member contributions, you are required to withdraw the entire amount. You have access to review your balance by registering and logging into your MyNMERB account. You can also contact NMERB via the Member Services contact form. Please note: You may not take a refund if you have already applied for retirement and have completed your final retirement documents.

To refund or rollover your contributions, complete and submit the Request for Refund and/or Rollover form. If you are requesting your funds within 90 days of termination, your employer must certify that you are no longer working. Employer contributions are not refundable.

The lump sum and/or rollover amount of total member contributions include interest. The interest rate is based on the five-year Treasury bill as of March 31 of each year. The current interest rate, as of 07-01-2021, is 0.92%. The NMERB does not pay interest on contributions paid into the NMERB Fund prior to July 1, 1971. For your information, you can view the Refund Interest Tables July 1, 1971 – June 30, 2024.

Contributions must be on deposit for one year to accrue interest. Refunded NMERB contributions may be directly rolled over into an IRA or other qualified plan (you must ask your provider if it will receive this type of tax- deferred funds) without penalty. The Internal Revenue Service (IRS) requires NMERB to withhold 20% of the total distribution and forward it to the IRS as a withholding. The IRS may also charge an additional early withdrawal penalty of 10% of Gross Distribution if you are under age 59.5.

You may want to consult with your tax advisor before taking a refund or transferring it to another qualified retirement plan. The NMERB cannot offer tax advice and is not liable for the tax effects of a refund or rollover.

How do I apply for a Refund?

Step 1

If you terminated employment within the last 90 days obtain the Request for Refund and/or Rollover Application form from your employer. (Section V) of the application should have an authorized Employer signature certifying a termination date and indicating when the final contributions will be reported. If an authorized employer signature is absent on the application, the Request for Refund and/or Rollover application will be returned to you. Regardless of who mails the application to NMERB on your behalf, it is your responsibility to ensure that your Request for Refund and/or Rollover Application form was submitted to NMERB.

If you have not been employed with an NMERB employer within the past 90 days or longer you can download the Request for Refund/or Rollover Application form. The form is located on the Forms page of this website. An employer-authorized signature is not required if 90 days or more have elapsed since your effective termination date.

Step 2

Read and complete Request for Refund/or Rollover Application form and sign in front of Notary Public (if married, the member’s spouse must also sign in front of Notary Public).

The form must be completed in blue or black ink only and white out on any section of the form is not permitted. Once you have completed the form please mail or bring the original form into one of NMERB’s offices. Copied, faxed or emailed applications are not accepted. *If you were divorced or legally separated after beginning employment with an NMERB employer, you must submit a release of claims from your ex-spouse, documents that indicate that your retirement is your sole and separate property, a Qualified Domestic Relations Order that divides your NMERB benefits, or a court document that indicates that your divorce was prior to earning any NMERB service.

Step 3

Please check your application for accuracy. You must select one of the options from Section II: Direct Refund, Direct Rollover or Direct Partial Rollover. If you select a rollover to another qualified plan you must include your financial institution’s information and an account number. If you wish to have your request processed as soon as administratively possible and waive the Federal 30-day waiting period, please check the appropriate box. Both you and your spouse, if you are married, must sign this form in the presence of a notary public in Sections III and IV. Receipt of funds may take up to 90 days from initial request.

Send the original notarized, completed application and any required documents to:

The New Mexico Educational Retirement Board
PO BOX 26129
Santa Fe, NM 87502-0129

If I previously refunded my contributions, can I reinstate that time at a later date?

Yes. If you have previously taken a refund of your contributions and wish to reinstate your service credit into the Defined Benefit Plan, you may purchase your withdrawn service by paying the New Mexico Educational Retirement Board (NMERB) the withdrawn amount plus interest for the period during which the funds were withdrawn. You will be subject to the current tier status and retirement eligibility requirements in effect at the time of your new employment date.

For information on reinstating your service credit see Active Member- Service Credit Purchase.

For more information please see the Member Handbook or use the Contact Member Services form.