Keep it (vested: 5+ years)
With five or more years, a member who leaves before age 55 and does not withdraw contributions has a vested benefit. It is payable at normal retirement age (62 for Group C #1, 65 for Group C #2), or as early as age 55 with the early-retirement reduction, and is figured like a normal or early benefit. By statute a Group C #2 member may also start it when age plus service equals 90, if that comes first. The deferred pension is computed on compensation and service at withdrawal. You can still ask for a refund later; a refund cancels the service credit and any right to a benefit.
Group C #2 handout, pp. 1, 3, Vested Benefit; Group C #1 handout, pp. 1, 3, Vested Benefit; 16 V.S.A. § 1940(a)(1)(A)-(B), (a)(2)Take a refund
A member who leaves before retirement can withdraw accumulated contributions with regular interest, less not more than one-third of the interest credited (as the Board determines). Withdrawing ends membership. Non-vested members under the later of normal retirement age or 62 must consent to any payout over $1,000. Eligible distributions can be rolled over directly to another qualified plan or IRA.
You get your contributions plus at least 66.7% of the interest credited.
Group C #2 handout, p. 3, Vested Benefit (a refund cancels service credit and any right to future benefits); 16 V.S.A. § 1940(a)(1); 16 V.S.A. § 1933(d); 16 V.S.A. § 1943a(i), (k); 2025 valuation, p. 62, Exhibit H (Refund of contributions)Vested benefit for Group C #2: the handout says it is payable at 65, or from 55 with a penalty. The statute also lets it start when age plus service equals 90. Not a contradiction (the handout omits it); the guides mention both.
Group C #2 handout, p. 3, Vested Benefit; 16 V.S.A. § 1940(a)(1)(B)The interest VSTRS credits (set between 3% and 5%) and how much of it you lose on a refund aren't published.
We show the legal limits: you get at least two-thirds of the interest.
16 V.S.A. §§ 1940(a)(1), 1943(b)Coming back
A teacher who rejoins after ceasing to be a member may get prior service credit by depositing the member contributions and the State contributions that would have been paid, with interest. 16 V.S.A. § 1953 See Buying service credit.
What the sources say
- You are vested after 5 years of service. If you leave before 55 and don't withdraw your contributions, you keep a vested benefit. It is payable at 62 (Group C #1) or 65 (Group C #2), or as early as 55 with the early-retirement reduction.Group C #2 handout, pp. 1, 3, Vested Benefit; Group C #1 handout, p. 3
- By law, a Group C #2 member with a vested benefit can also start it when age plus service equals 90, if that comes first.16 V.S.A. § 1940(a)(1)(B)
- You can always ask for a refund of your contributions plus interest, even after your account is vested and deferred. A refund cancels your service credit and any right to a future benefit. VSTRS may keep up to one-third of the interest.Group C #2 handout, p. 3; 16 V.S.A. § 1940(a)(1)
- If you later rejoin, you can get your earlier service back by paying both your contributions and the State's contributions, with interest.16 V.S.A. § 1953
A deferred pension starts at your group's normal retirement age, or from 55 with the early-retirement cut. If you take a refund and come back later, buying service credit explains restoring that time. A death before retirement is covered under survivor benefits.
Questions
What happens to my VSTRS pension if I leave teaching?
With 5 or more years you are vested: leave your money in and you can start a benefit later, at normal retirement age or as early as 55 with the early-retirement cut. With fewer years, you can take a refund of your contributions with interest.
Should I take a refund?
A refund ends your membership and cancels your service credit and any right to a future benefit. If you are vested, a monthly benefit for life is usually worth much more. Ask VSTRS for both numbers before you decide.
Source: VSTRS Eligibility for Retirement: Group C #2 handout (Office of the State Treasurer), undated (PDF of Sept. 21, 2012), with 16 V.S.A. chapter 55 as of the 2026 session, pp. 1, 3; 2025 valuation pp. 59, 62; Group C #1 handout pp. 1, 3; 16 V.S.A. §§ 1933, 1940, 1943, 1943a, 1944, 1953. Last reviewed .