January 2013
December 18, 2012

ERS: Consider your pension payment options

Author: State Comptroller Thomas P. DiNapoli
Source: NYSUT United

Are you an Employees' Retirement System member getting ready to retire? When you do, you’ll need to choose a pension payment option. You may select the Single Life Allowance, which pays you the maximum amount, but pays nothing to a beneficiary after your death. Or you can choose an option that pays you a smaller monthly benefit during your lifetime, but provides for a possible payment to your designated beneficiary(ies) after your death.

Choosing an option is not a decision to be made lightly. And once the deadline has passed, you cannot change your option. So which one should you choose?

Q: What information should I consider when choosing my benefit payment option?

A: Do you need to ensure an adequate standard of living for a dependant or beneficiary? Consider what that person’s life would look like if you died and left nothing from your pension. Would his or her income cover expenses? Would there be enough money to set aside for emergencies? Would the person be financially sound? If not, you may want to consider an option other than the Single Life Allowance.

Q: How much will my beneficiary receive if I don’t select the Single Life Allowance?

A: Before you file for retirement, you should request an estimate of your benefit. Your estimate will list all the options available to you and the estimated amount each option would pay you and/or your beneficiary. You can request an estimate as early as 18 months prior to your retirement.

Q: Where can I get financial advice before making my final option selection?

A: A competent financial advisor can help you avoid costly mistakes. Financial advisors will assess your present financial condition and help you develop a practical plan to meet your needs and goals. For help in finding one, contact the National Association of Personal Financial Advisors at www.napfa.org.

Q: When do I choose my option?

A: You choose your option by filing an option election form. You can submit the form when you file for retirement, but you must submit it before the first day of the month following your retirement, unless we notify you otherwise.

Q: How can I get more information?

A: Email us from our website at www.osc.state.ny.us/retire/contact_us or contact our Call Center toll-free at 866-805-0990 or 518-474-7736 in the Albany, New York area.