Notice: 1099-Rs, Benefit Statements and direct deposit magnets will mail by the end of the month.
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Exiting Employees FAQs
Your former employees don't have to leave their retirement savings behind if they stop working for your county or district. They have options, including leaving their account open, so their savings continue to grow.
Be sure to enter the last date of employment for your exiting employees. This saves you time and reduces your paperwork, and it helps prevent delays when a former employee applies for benefits. Former employees without a last day of employment on file may not see accurate benefit estimates on their annual statements or online.
Here are the most common questions related to exiting employees:
Q) Is an employee required to take a withdrawal if they leave employment?
A) No. When an employee leaves your organization, they don’t have to withdraw their TCDRS account. They can leave their money in their account, and it will continue to earn 7% annual compound interest. Even if they are not vested, they might go to work for another participating employer and eventually earn enough proportionate service time to retire.
Employees also have the option of rolling their funds over into another tax-deferred retirement account or withdrawing their entire account balance. In both cases, they forfeit a possible lifetime benefit and employer matching. If an employee withdraws their account, they pay taxes.
Please encourage exiting employees to explore their account options before making a decision.
Q) When do I enter the last date of employment?
A) Please enter the last date of employment for each exiting employee as soon as you know they’re leaving your organization, even if the employee is not retiring. Please do not wait until they apply for a benefit. This could cause delays with processing their application. TCDRS cannot process a benefit application without the last date of employment on file.
Q) How do I enter the last date of employment?
A) Sign into the Employer Portal and select “Employee Terminations” from the left menu. You can enter the last date of employment for employees individually, or you can upload a file that contains dates for many employees. If you choose to upload a file, the file must be in a CSV format.
Q) How do I change the last date of employment for an employee?
A) To change the last date of employment for an employee with an open account (meaning they haven’t withdrawn or started their retirement benefit yet), just type the new date into the “Termination Date” field to override the previous one. If you need to remove a date for an employee who decided not to leave, or update a date for an employee with a closed account, please call TCDRS Member Services at 800-823-7782.
Q) How do I send an extra deposit?
A) After an employee leaves employment, you may discover that they have more money coming to them, such as from PTO or vacation time (both of which are included in TCDRS deposits). You don’t have to do anything special to add that money to the employee’s account. Just include the deposit amount in your regular payroll report.
Q) What if I forget to enter a last date of employment?
A) We will reach out if a former employee applies for a benefit and we do not have a last date of employment on file. Please enter the last date of employment as soon as you receive notice the employee is leaving to help avoid future processing delays.
Q) Is there a way to see if a last date of employment has been entered for a former employee?
A) Yes. When you sign into the Employer Portal, you can view the “Missing Last Date of Employment” under “Reports” in the left menu. This provides self-service, so you can actively manage any missing dates.
Get more information on why TCDRS is a model plan when it comes to retirement.