BENEFIT PAYMENT OPTIONS
YOU MAY CHOOSE THE FORM OF BENEFIT PAYMENT
When you apply to retire you must elect one of four benefit payment "options". You should review your option choices with care and select the one that will provide you with retirement income in the form best suited to your personal needs. If you elect to have your retirement benefits paid to someone else when you die, the recipient would be your contingent annuitant, commonly referred to as your "optionee". The optional forms of payment available are:
1. Option D - Straight Life Annuity. This option provides you with the highest monthly benefit for your lifetime. However, all payments stop at your death.
2. Option A - 50% Spouse. This option first provides a reduced monthly benefit to you for life. Then, 50% of that benefit will continue after your death for the lifetime of your surviving spouse (contingent annuitant).
3. Option B - 50% or 100% Survivor. This option arranges to continue payments after your death to the contingent annuitant you choose. This contingent annuitant can be any person, including your spouse. The option provides a reduced monthly benefit to you for life. After your death, a percentage of that benefit, either 50% or 100%, whichever you choose, will continue for the lifetime of your contingent annuitant.
4. Option C - 10 Year or 20 Year Period Certain. This option provides a reduced monthly benefit to you for your lifetime with payments guaranteed from your retirement date for 10 or 20 years (whichever you choose). If you should die within 10 years (120 payments) or 20 years (240 payments) from your date of retirement, the remaining payments, in accordance with your selection, will be made to your contingent annuitant(s). This is the only option which allows you to name more than one contingent annuitant, each of whom would share each remaining monthly payment equally.
If you elect a benefit option that will continue an income to a surviving contingent annuitant, the benefit amount you receive will depend on your age and, with the exception of Option C, the age of your contingent annuitant. In the case of Option C, your closest age is the determining factor. The amount is less than you would receive if benefits were paid to you alone.
Important Information to Consider When Making Your Option Election
If you have been married for at least one year prior to the commencement of your retirement benefits, written spousal consent will be required if you do not provide a lifetime guarantee (50% or 100% option) for that spouse.
Regardless of your option choice or marital status, you must submit proof and/or attest to your marital status within one year prior to the date your retirement benefits are to commence. Failure to submit the required waiver and documentation prior to your effective date of retirement may result in a delay of retirement income payments.
If you retire and have not designated in writing the benefit payment option you would prefer or have not obtained the consent of your spouse, your benefit will be paid according to your marital status when payment begins.
Your benefit payment option cannot be changed after retirement. Therefore, it is very important that you elect your "option" following careful review of all the available choices.
Except for Option C, each option requires you to designate a beneficiary. Your beneficiary would receive a lump sum refund of any remaining contributions and interest. This lump sum payment occurs only after your death and the death of your designated contingent annuitant, if applicable.
If you elect Option D, at the time of your death not only do all pension payments stop, but health insurance for any dependents you were covering through the State Employees Retirement System also ends. Those dependents would be offered the choice of assuming the full (100%) cost of the group health insurance for a limited period only (currently 3 years). Then all health insurance benefits available through the state would cease. Reimbursement for your dependent's Medicare Part B (normal premiums) will also end at your death.
If you elect Option A, B, or C, the state sponsored health coverage and the payment of any reimbursement of the Medicare Part B normal premiums would be extended at the time of your death to your designated contingent annuitant(s) and his or her eligible dependents for as long as the monthly benefit continues provided that the contingent annuitant and dependents were your dependents or cohabited with you at the time of your death.
DEATH BENEFITS MAY BE PAYABLE TO YOUR SURVIVOR
Before You Retire
If you should die before you retire, death benefits may be due your survivors. It is important, therefore, for you to know that state employees can, in some instances, influence the type and amount of benefits which may be available to the survivor(s). Should you become seriously ill or injured, or have a life threatening condition, you or someone on your behalf should contact the Retirement Services Division Counseling Services Unit as soon as possible, either directly or through your employing agency.
Spousal Benefits Before You Retire
Your spouse may receive monthly Tier I benefits if you die before retirement. Should you die while actively employed or while on an approved leave of absence, your spouse will receive a monthly benefit if:
For your spouse to receive benefits, you must have been married for at least the one year period immediately preceding your death. The agency where you were employed should be notified of your death as soon as possible.
Your spouse's benefits would begin on the first of the month on or after your death. Monthly payments would then continue for his or her lifetime. The amount would equal 50% of the following: the payment you would have received under the Spouse option averaged with the payment you would have received under the Straight Life Annuity option had payments started the day of your death. If you had not reached age 55 at the time of your death, the benefit would be figured as though you were 55.
Spousal Benefits If You Leave With 25 Years Of Service
Suppose you leave state employment with 25 years of service, leave your contributions in the System and you die before receiving any retirement benefits. Your spouse will receive retirement benefits, provided you had been married to each other for at least the twelve months preceding your death.
Benefits would be paid as described previously in the section entitled "Spousal Benefits Before You Retire".
If A Spousal Benefit Is Not Applicable
If you are not married or if your spouse is not eligible to receive monthly benefits, your designated beneficiary (who could be your spouse) will receive a lump-sum payment. The amount will equal your contributions plus 5% annual interest credited from January 1, 1982, or the July 1st following date of entry into the Plan, whichever is later.
After You Apply For Retirement - But Before Benefits Begin - The 90 Day Protection Window
Suppose you apply for retirement and select Option B or Option C (refer to the section entitled "Benefit Payment Options"). If you die within 90 days after you first elect either one of these options, but prior to your date of retirement, your contingent annuitant may receive payments in accordance with your selection. If your death occurs after this 90 day period and you have not yet retired, or if you die within 90 days after electing Option D or A but prior to your date of retirement, the benefit paid will be as described earlier in the section entitled "Spousal Benefits Before You Retire". Again, both the agency where you were employed and the Retirement Services Division should be immediately notified of your death.
After Retirement Benefits Have Started
If you die after benefits have started, your designated contingent annuitant or beneficiary will receive any benefits due under the option you chose before retirement. It is necessary to have the Retirement Services Division notified of your death as soon as possible to facilitate the commencement of benefits for your contingent annuitant or beneficiary.
Suppose you elect the Straight Life Annuity option and you die before your contributions and earned interest are depleted. In this case, your designated beneficiary will receive a lump sum benefit equal to the remaining portion of your contributions and interest.
If you provide for an income to continue to a contingent annuitant for life and both you and that contingent annuitant die before your contributions and earned interest are depleted, a similar refund will be made. If no beneficiary was designated, the lump-sum benefit will be paid to the estate.
Job Related Death
The Tier I Plan may provide a benefit to your family if your death is a result of a job related injury. Death must not have been caused by an intentional or careless act on your part. For deaths occurring on and after January 1, 1998, the following benefits are payable.
If you are survived by a spouse and at least one dependent child under 18 years of age, the Plan pays your husband or wife $100,000. The money will be paid in equal monthly installments over a period of at least ten years. All payments to your spouse will end if he or she dies or remarries during this time. In addition, each dependent child will receive $50 a month until his or her 18th birthday.
If you are survived by your spouse only, the Plan pays $50,000 to that spouse in equal monthly installments. Payments will be made over a period of at least ten years. They will end if your spouse dies or remarries during this period.
Suppose you have no surviving spouse or children, but you leave one or both parents dependent upon you. In this case, your parent(s) will receive $50,000 in equal monthly installments over a ten year period. If one parent dies, the other parent will continue to get the remaining payments. All benefits will end if both parents die within the ten year period.
Family Benefits For State Police Officers
In addition to the survivor benefits described in this section, State Police Officers have additional family benefits. Your spouse and dependent children may be entitled to receive a monthly check if you die. To learn the amount of this benefit, please contact your agency's Personnel/Payroll Office.
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