Leaving URS: refund or wait?

Short answer: once you have 4 years of service, you can leave and still collect a URS pension at retirement age. Tier 1 Noncontributory members make no member contributions, so there's usually nothing to refund. In Tier 2, your own 401(k) deferrals are always yours, and a refund of member contributions is taxed. See which tier, taxes and when you can retire, or estimate a deferred pension in the calculator.

• If you leave all URS employment you can request a refund of your member contributions, if you have any, after 60 days from your last pay period. A refund forfeits that service. Tier 1 Noncontributory members don't make contributions; Tier 2 Hybrid members pay any pension cost above 10% (1.30% of pay from July 1, 2026).Tier 1 Highlights (2026-27), p. 5; Tier 2 Highlights (2026-27), pp. 6-7; Comparing Tier 2 Plans (2026-27), p. 14; URS Actuarial Valuation (Jan. 1, 2025), App. 2, p. 96
• With four years of service you're vested: leave your account and draw a reduced or unreduced benefit once you're eligible, based on your service and salary when you left.Comparing Tier 2 Plans (2026-27), pp. 27, 42; URS Actuarial Valuation (Jan. 1, 2025), App. 2, pp. 98, 118
• Refunds are taxed: 20% federal withholding unless rolled over, Utah income tax, and a 10% penalty before 59 1/2 (unless you work into or beyond the year you reach 55).Tier 1 Highlights (2026-27), p. 7

The rules

If you end all URS-covered employment you may request a refund of your member contributions, if you have any. A refund forfeits the service credit those contributions paid for. It is processed after 60 days from the last date of the pay period for which contributions were paid. You can't get a refund if you move to or are rehired by another participating employer, are on leave, or are applying for long-term disability. Tier 1 Highlights (2026-27), pp. 5-6; Tier 2 Highlights (2026-27), pp. 6-7; Utah Code 49-11-501

Refunds face 20% federal withholding unless rolled over, Utah income tax, and a 10% penalty before 59 1/2 (not if you work into or beyond the year you reach 55). Tier 1 Highlights (2026-27), p. 7; Tier 2 Highlights (2026-27), p. 7

If you return as an active member you (or your employer) can reinstate withdrawn service by repaying the refund plus interest, in a lump sum or by payroll deduction, before your retirement date. Tier 1 Highlights (2026-27), pp. 7-8; Tier 2 Highlights (2026-27), pp. 11-12; Utah Code 49-11-502, 49-11-503

401(k) money

Tier 2 401(k) money: your own deferrals are always vested; employer contributions vest after four years. If you leave before vesting and return to a URS employer within 10 years, the employer contributions are reinstated; otherwise they're forfeited. Comparing Tier 2 Plans (2026-27), pp. 27-28, 32, 42; Utah Code 49-22-303(2), (6), 49-22-401(3), (7)

Not vested in a pension and wondering what you'd get later? Try the calculator with "I've stopped working" ticked, or see buying back service.

Questions