When you retire, you will make a one-time, irrevocable choice of how you would like to receive your benefits.
Survivor benefits or options are selected at the time of retirement by the retiring member when they complete the application for retirement form. Your employer benefit plan will determine the survivor options that are available to you. Most plans provide at least four options for survivor benefits. Generally, providing the least guaranteed survivor benefit will provide you with the most monthly benefit. PMRS does not recommend which survivor option should be selected. The best option will vary depending on your personal circumstances.
Things to consider when selecting a survivor option:
- Your health and your survivor’s health
- Life expectancy and family history
- Other pensions that may provide for your survivor(s)
The list below is only a general overview of plan benefits. Please check with your employer’s benefit plan to see what is available in your payment options.
Single Life Annuity
Under this option you will receive a continual income throughout your lifetime with no beneficiary benefit. In the event of death, any member contributions and credited interest not already paid to you in the form of a benefit will be paid to your designated beneficiary.
The following benefits are actuarially reduced alternatives to the Single Life Annuity benefit.
Single Life Annuity with Guaranteed Present Value
Selecting this option provides you with a reduced lifetime benefit so that the remaining lump sum value of the account will go to your beneficiary. Under this option, if you die before receiving the present value of your retirement benefit (the accumulated member and municipal contributions), the remainder will be paid to your named beneficiary or to your estate. If the amount is more than five thousand dollars ($5,000), your beneficiary may elect to receive it in (1) a lump sum, (2) a monthly benefit, or (3) a lump sum with the remainder as a monthly benefit.
Single Life with 10-Year Period Certain
Under this option you will receive a continual income throughout your lifetime or a minimum of 10 years – whichever is longer. In the event of your death prior to receiving 10 years of payments, your beneficiary(ies) will continue to receive payments for the remainder of the 10-year period. In the event of death after 10 years of receiving payments, any member contributions and credited interest not already paid to you in the form of a benefit will be paid to your designated beneficiary.
Single Life with 20-Year Period Certain
Under this option you will receive a continual income throughout your lifetime or a minimum of 20 years – whichever is longer. In the event of your death prior to receiving 20 years of payments, your beneficiary(ies) will continue to receive payments for the remainder of the 20-year period. In the event of death after 20 years of receiving payments, any member contributions and credited interest not already paid to you in the form of a benefit will be paid to your designated beneficiary.
50% Joint Survivor
This option allows a joint and 50% survivorship monthly benefit. Upon your death, if the survivor annuitant is still living, the annuitant receives a benefit that is one half (1/2) of your original benefit. If the survivor annuitant is no longer living, the benefit ceases.
This option will not appear on benefit estimates if a joint survivor is not identified. If you have named your spouse as a beneficiary, that person will be listed as the joint annuitant by default. If a spouse was not listed as a beneficiary, you must notify PMRS if you would like to use another person as joint survivor.
100% Joint Survivor
This option allows you to provide a joint and 100% survivorship monthly benefit. With this option, you choose a survivor annuitant, and as long as either you or your survivor annuitant is living, the benefit continues to be paid at the same dollar level.
This option will not appear on benefit estimates if a joint survivor is not identified. If you have named your spouse as a beneficiary, that person will be listed as the joint annuitant by default. If a spouse was not listed as a beneficiary, you must notify PMRS if you would like to use another person as joint survivor.
Lump Sum
Your plan allows for a lump sum withdrawal of your contributions and interest when you retire. In combination with any of the payment options above, you can receive a single lump sum payment of the contributions you made to the plan plus interest earned on those contributions. If the lump sum option is elected, the monthly payment option you also elect will be proportionally reduced by the ratio of the lump sum amount compared to the value of your total benefits (including the lump sum amount).
If you made after-tax contributions, a portion of your lump sum distribution will be non-taxable in accordance with IRS regulations. The non-taxable portion of the lump sum is equal to the ratio of total non-taxable contributions to the Present Value of the benefit at the time of retirement.
