Leave your money in (if vested)
You vest with five years of service credit in the NPERS School Plan, or by working at a participating employer up to age 65 with at least half a year of service (members who joined before July 1, 2016). Unvested members can only take a refund. School Handbook p. 15, Eligibility/Vesting
A vested member who leaves may leave the account and apply at retirement age. Monthly benefits do not grow after the member can draw an unreduced benefit. School Handbook p. 19, Deferral
A deferred pension uses the same benefit formula, and you can start it unreduced at 65 or early with a cut (see early retirement). See what 12 years would pay at 65.
Take a refund
After you leave you may withdraw your contributions plus interest as a lump sum or a rollover. Refunds never include employer contributions. A refund erases your service credit and ends your membership. You may apply no earlier than four months after termination; payment comes at least 20 business days after a complete application. Refunds over $25,000 are paid by ACH. School Handbook p. 20, Refund
A refund requires a bona fide termination; otherwise it must be repaid. School Handbook p. 20 (WARNING)
Refunds paid directly to you: NPERS must withhold 20% federal and 5% Nebraska income tax. Before age 59 1/2 a 10% federal penalty and a 3% Nebraska penalty may apply (exceptions include rollover within 60 days, QDRO payments, large medical expenses, separation in or after the year you turn 55, death or disability). School Handbook p. 55, When Receiving a Refund of Your Account More on taxes on refunds and benefits.
Coming back and repaying a refund
Repaying matters for more than service: a member who returns after a refund is treated as new, and the tier is set by the return date unless the refund is repaid in full (see which tier am I?).
Members rehired on or after April 17, 2014 may make a one-time election to repay a refund within five years of returning (or before termination, if earlier). The cost is the refund plus the actuarial assumed rate of return since it was taken. Oldest years are bought first; partial repayment restores service in proportion. Full repayment restores your prior tier. Sunset members (active by April 16, 2014) had until April 16, 2020. School Handbook pp. 23-24, Repayment of Refunded Service
| Refund taken | Multiply by |
|---|---|
| July 2023 | 1.0577 |
| July 2021 | 1.2319 |
| July 2019 | 1.4236 |
| July 2016 | 1.7768 |
| July 2013 | 2.2383 |
| July 2010 | 2.8196 |
| July 2006 | 3.836 |
| July 2001 | 5.6363 |
| July 1996 | 8.2433 |
The full table runs from July 1967 (48.7198) to July 2023 (1.0577). Refund Repayment Factors (2024)
Don't miss the deadline
A terminated member must start the monthly benefit or take a full refund by the initial RMD due date (April 1 after the year you reach RMD age, or after the year you terminate if later). Missing it limits you to a refund minus the RMD; the account then goes to Unclaimed Property. School Handbook p. 56, Required Minimum Distribution (RMD)
- Born before July 1, 1949: age 70.5
- Born July 1, 1949 to before January 1, 1951: age 72
- Born January 1, 1951 to before January 1, 1960: age 73
- Born January 1, 1960 or later: age 75
From the sources
- You are vested after five years of service credit. Members who joined before July 1, 2016 also vest by working for a participating employer up to age 65 with at least half a year of service. Unvested members can only take a refund.School Handbook p. 15, Eligibility/Vesting
- Years in another Nebraska governmental plan can count toward vesting (not toward your benefit) if NPERS receives your vesting credit application within 180 days of starting. There are no exceptions to the deadline.School Handbook p. 16, Vesting Credit
- Since July 1, 2002 you earn a full year of service for 1,000 or more hours in a plan year (July 1 to June 30), and 1/1000 of a year for each hour below that.School Handbook p. 21, Accrual Rate
- If you leave before retiring, you can take your contributions plus interest as a cash refund or rollover, no sooner than four months after you leave. Refunds never include employer money, and taking one erases your service. If you are vested you can instead leave the money in and claim a pension later.School Handbook pp. 19-20
- On a cash refund NPERS withholds 20% federal and 5% Nebraska tax. Before 59 1/2 you may also owe a 10% federal and 3% Nebraska penalty unless you roll it over or an exception applies.School Handbook p. 55
- If you come back after taking a refund, you have five years from your return to repay it (a one-time election). The cost is the refund plus the plan's assumed investment return since you took it. NPERS's factor table gives estimates, for example 1.4236 times a refund taken in July 2019.School Handbook pp. 23-24; Refund Repayment Factors (2024)
- You must start your pension or take a refund before your required minimum distribution deadline: age 73 if born 1951-1959, 75 if born 1960 or later. Miss it and you lose the lifetime pension.School Handbook p. 56, Required Minimum Distribution
Questions
Can I get my money back if I leave?
Yes: your own contributions plus interest, no sooner than 4 months after you leave. Never the employer's share.
Should I take a refund or leave the money in?
If you're vested (5 years), leaving it in keeps a lifetime pension from age 60 or later. A refund erases your service.
Can I buy back a refund?
If you return, you have 5 years to repay it, with interest at the plan's assumed return.
Source: Nebraska School Employees Retirement System Handbook, Revised 07/2026, pp. 15, 16, 19, 19-20, 20, 21, 23-24, 55, 56. Also: Refund Repayment Factors (2024); Neb. Rev. Stat. §§ 79-921, 79-955. Last reviewed .