Vesting
Vested after 10 years of creditable service. Sick leave cannot be used to reach the 10 years. A vested member who leaves can leave contributions in and apply for a benefit effective the first of the month after age 60 (Tier 1) or 62 (Tier 2). With less than 10 years, contributions may stay up to five years; then the account is terminated and refunded. Handbook p. 9, Vesting; p. 10, Ineligible for Retirement; Ala. Code § 16-25-3 (board sets deferred-benefit service, not less than 10 years)
A refund
Contributions are refunded in full only on request after leaving employment; no partial refunds. Interest is credited at 4% a year on the prior year's average balance, but only part is refunded and only with 3+ years of membership service. A refund cancels all service credit and, for vested members, the lifetime benefit. Taxable portion: 20% federal withholding unless rolled over; possible 10% additional tax under 59 1/2; no Alabama income tax. Handbook pp. 10-11, Termination of Service, Refund of Contributions; Ala. Code § 16-25-14(i)(1)
How much of your interest you get back
| Membership service | Interest refunded |
|---|---|
| Less than 3 years | 0% |
| 3 to less than 16 years | 50% |
| 16 to less than 21 years | 60% |
| 21 to less than 26 years | 70% |
| 26 years or more | 80% |
You always get back 100% of your own contributions.
Before you decide
A refund ends your service credit and, if you're vested, your lifetime benefit. You can buy back withdrawn service only after you return and work 2 years; see buying service credit. For taxes on a refund, see taxes.
From the sources
- You are vested after 10 years of service. If you leave vested, you can leave your money in and apply for a benefit at 60 (Tier 1) or 62 (Tier 2).Handbook pp. 9-10
- You can instead take a refund of all your contributions. Interest is refunded only with 3+ years of membership service: 50% of it at 3-15 years, rising to 80% at 26+ years. A refund cancels your service credit.Handbook p. 11, Table of Refunds
- With less than 10 years, your money can stay in TRS of Alabama for up to five years; after that the account is closed and refunded.Handbook p. 10
Questions
When am I vested?
After 10 years of creditable service. Sick leave can't be used to reach it.
Can I get part of my money back?
No. Refunds are all or nothing, and only after you leave.
Do I get interest?
Only part of it, and only with at least 3 years of membership service. The share rises with service, up to 80%.
If I'm vested and leave, when can I draw?
From the 1st of the month after age 60 (Tier 1) or 62 (Tier 2), if you leave your money in.
Source: TRS Member Handbook, July 2026 edition (back cover "7-2026"), pp. 9, 9-10, 10, 10-11, 11, 25, 28, 31. Also: Code of Alabama Title 16, Ch. 25 and 25A. Last reviewed .