Teachers, nurses, police officers and state workers move for family, a spouse’s job or a cheaper place to live. Public pensions do not move with you. Each state runs its own system, and switching mid-career means making decisions about the pension you leave behind and the one you join.
Vesting decides your options
You are vested once you have enough service to be entitled to a pension later. Many plans vest at five years, including Texas TRS, CalSTRS, CalPERS and NYSTRS. Florida FRS needs six years for Tier 1 members and eight for Tier 2. Illinois TRS Tier 2 needs ten years for a pension.
If you leave before vesting, your only option is usually a refund of your own contributions, sometimes with interest. If you leave after vesting, you can choose between a refund and a deferred pension that starts when you reach the plan’s retirement age.
Refund or deferred pension
A refund gives you back your contributions, not the employer’s. You lose the employer-funded part of the benefit, which is usually larger. Cashing out also triggers income tax and, under age 55 in the year you separate, often a 10% early withdrawal penalty unless you roll it into an IRA or a new plan.
A deferred pension keeps your service credit in place. Its value is frozen at your salary when you left, which inflation erodes over the years before you collect, but it often still beats the refund. Our leaving teaching early guide works through the comparison.
Buying your old service in the new state
Many plans let you buy out-of-state public service. You usually must not be receiving, or be eligible for, a pension for the same years elsewhere, so some people take a refund in the old state and use it to buy the years in the new one. The price varies widely, from a share of salary to the full actuarial cost. Get a quote from the new plan before you cash out the old one, so you know whether the trade makes sense. See buying service credit for how to judge the price.
Reciprocity
True reciprocity between different states’ systems is rare. Within some states it is common. California’s CalPERS, CalSTRS and many county and city systems have reciprocal agreements, so your final salary in one can be used to figure your pension in the other, and service in each counts toward eligibility in both. If you are moving within a state, ask whether the systems are reciprocal before you resign.
Two pensions versus one
Staying in one system and earning a full career almost always pays more than splitting the same years across two, because final average salary and age factors reward long service in one plan. Splitting can still work well if both pensions vest and you buy service where it is cheap.
Social Security in the new state
Moving between covered and non-covered states changes your Social Security picture. Moving from a non-covered state such as Texas to a covered state such as Florida starts earning you credits. Since the Fairness Act, those credits count in full alongside your earlier pension.