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Your Benefit Options at Retirement
When you apply for retirement under the PERA Defined Benefit (DB) Plan, you’ll have three options for payment of your benefit. These options will determine whether another person continues receiving your benefit after you die, or if your benefits end upon your death.
If you would like a spouse/partner or other person to continue receiving your benefit after you die, it’s important to know the difference between a named beneficiary and a cobeneficiary. Your cobeneficiary will be whoever you designate at retirement to continue your monthly benefit if you die. And while it can be any person, it must be only one person and not an entity. Your named beneficiary(ies) is the person(s) or entity you’ve chosen to receive a lump-sum payment after all benefits have been paid to you and your cobeneficiary.
While your cobeneficiary cannot be changed in most circumstances (exceptions can include death and marriage; see Changing Your Cobeneficiary or Benefit Option), you can update your beneficiary information at any time. The age of your cobeneficiary will determine how much of a reduction there is to your benefit amount at retirement.
Option 1
You receive a monthly benefit for your lifetime. This is a single-life benefit. After your death, no future benefits will be paid. When you die, if there is any remaining balance in your member account, a single payment plus a 100% match will be made to your named beneficiary or beneficiaries (or your estate if no beneficiary exists).
Option 2
You receive a smaller lifetime monthly benefit than an Option 1 amount. Upon your death, your cobeneficiary will receive a monthly benefit that is half of what you were receiving for the remainder of their life (joint-life benefit). All benefits pass on to your cobeneficiary, including any PERACare premium subsidy and annual increase.
Under this option, your monthly benefit is reduced to pay for continuing monthly benefits to your cobeneficiary. The age of your cobeneficiary will determine how much of a reduction there is to your benefit amount.
After the death of both you and your cobeneficiary, if there is any remaining balance in your member account, a single payment plus a 100% match will be made to your named beneficiary (or the estate of the last person receiving a benefit if no beneficiary exists).
Option 3
You receive a smaller lifetime monthly benefit than an Option 2 amount, but when you die, your cobeneficiary will receive the same amount that you were receiving. All benefits pass on to your cobeneficiary, including any PERACare premium subsidy and annual increase.
Under this option, your monthly benefit is reduced to pay for continuing monthly benefits to your cobeneficiary. The age of your cobeneficiary will determine how much of a reduction there is to your benefit amount.
After the death of both you and your cobeneficiary, if there is any remaining balance in your member account, a single payment plus a 100% match will be made to your named beneficiary (or the estate of the last person receiving a benefit if no beneficiary exists).
If you’d like to estimate your monthly benefit under each retirement option, log in to your member account or call our Customer Service Center at 800-759-7372.
Option A
You receive a monthly benefit for your lifetime. This is a single-life benefit. After your death, no future benefits will be paid. When you die, a single payment of any remaining balance, without a match, will be made to your named beneficiary (or your estate if no beneficiary exists).
Option B
You receive a monthly benefit for your lifetime. Additionally, your monthly benefit is guaranteed for a set period (usually 10 years). If you die before the end of the guarantee period, PERA will continue paying that amount to your Option B beneficiary(ies) for the remainder of the guarantee period; after that, the payments will end. If your Option B beneficiary(ies) receives a benefit after your death and dies before the end of the guarantee period, a single payment will be paid to the estate of the deceased beneficiary. If your Option B beneficiary(ies) dies before you, you do not name any additional Option B beneficiary(ies), and you die before the end of the guarantee period, a single payment will be made to your estate.
Option P2
You receive a smaller lifetime monthly benefit than an Option A benefit, and when you die, your cobeneficiary will receive a lifetime monthly benefit that’s half of your benefit for the remainder of their life. If your account still has a balance when your cobeneficiary dies, a single payment of the remaining balance, without a match, will be made to your named named beneficiary (or your cobeneficiary’s estate if no beneficiary exists).
Under this option, your monthly benefit is reduced to pay for continuing monthly benefits to your cobeneficiary. The age of your cobeneficiary will determine how much of a reduction there is to your benefit amount.
Option P3
You receive a smaller lifetime monthly benefit than an Option P2 benefit, and when you die, your cobeneficiary will receive a lifetime monthly benefit that’s the same as your monthly benefit for the remainder of their life. If your account still has a balance when your cobeneficiary dies, a single payment of the remaining balance, without a match, will be made to your named named beneficiary (or your cobeneficiary’s estate if no beneficiary exists).
Under this option, your monthly benefit is reduced to pay for continuing monthly benefits to your cobeneficiary. The age of your cobeneficiary and their relationship to you will determine how much of a reduction there is to your benefit amount.
If you’d like to estimate your monthly benefit under each retirement option, log in to your member account or call our Customer Service Center at 800-759-7372.
