Retirement Benefit Options
The following options available to retirees are the same for all retirement types. The option you select at the time of your retirement determines what will happen to your retirement account at the end of your life. Remember: no matter which option you select, you will receive a lifetime benefit.
This option provides the highest payment to the retiree and leaves nothing for a beneficiary. All payments will cease upon the retiree’s death and no survivor benefits will be provided. This may be a good option if you have no dependent or incapacitated dependents and if your spouse has independent pension income. This determination is established by law based on age.
This option provides an allowance that is approximately 2% less than Option A. Upon the retiree’s death, the balance of the retiree’s contributions (annuity), if any, is paid to the retiree’s beneficiary/beneficiaries. Annuity funds will be paid to you monthly as part of your benefit, and are typically depleted in 10 to 15 years. The Retirement office can give you a more exact depletion date. If you outlive your annuity balance, your beneficiary will receive nothing. If you outlive your beneficiary, you can name another. This may be a good option if you have temporary dependents, such as children in college, and you are concerned about leaving enough for them to become independent.
Option C is the joint and last survivor allowance. The retiree’s allowance is approximately 7% to 14% less than the Option A allowance. Upon the retiree’s death, the designated beneficiary will be paid a monthly allowance for the remainder of the beneficiary’s lifetime. The survivor benefit is equal to 2/3 of the retirement allowance that the retiree was receiving and is paid to the beneficiary for the remainder of his/her life. This option only allows you to name ONE beneficiary (eligible beneficiaries under Option C are a spouse, child, sibling or parent). If you outlive your named beneficiary, you will become an Option A retiree. This may be a good option if your spouse is dependent on your allowance, or if you have a permanently disabled dependent who will need a lifetime allowance.