When you retire, you must choose a pension payment plan. While many things will determine the amount of the pension you will receive when you retire, such as your age, years of service credit and final average salary, the payment option you choose determines if a payment will be made to a beneficiary when you die. But which option is right for you? Let's take a closer look.
The Single Life Allowance is the only option that does not allow you to designate a beneficiary. It provides you the maximum monthly benefit amount, but all payments stop at your death. If you choose an option that allows you to designate a beneficiary, your monthly benefit will be lower in order to provide for your beneficiary after you pass away.
The Joint Allowance and Pop-Up Joint Allowance options require you to name only one beneficiary, which you cannot change. This monthly benefit amount is based upon the life expectancies of you and your beneficiary. Generally speaking, the younger your beneficiary is, the lower your monthly benefit will be.
The remaining options (Cash Refund – Initial Value, available only to Tier 1; Cash Refund – Contributions, available to Tiers 1 and 2; and the Five-and 10-Year Certains, available to all tiers) allow you to designate more than one beneficiary, and you may change your beneficiary at any time. The life expectancies of your beneficiaries are not taken into account.
It is up to you to decide which option is best for you. However, if you are divorced, you may have to name your ex-spouse as your beneficiary. If so, the details will be outlined in your Domestic Relations Order. For more on how divorce may affect your benefits, visit our Divorce and Your Benefits page at www.osc.state.ny.us/retire/members/divorce/index.php.
You can change your option up to 30 days after your benefit becomes payable. For instance, if you retire any time in March, your benefit becomes payable in April and you have until the end of April to change your option.
If you do not choose an option in a timely manner, Retirement and Social Security Law (RSSL) requires that we must choose an option for you. For Tiers 1 and 2 members, we will process your retirement as if you had selected the Cash Refund – Contributions option, and for Tiers 3 through 6, the Single Life Allowance option. For a description of options available to you, visit our Benefit Payment Option Descriptions page at www.osc.state.ny.us/retire/planning/options.php.
Every issue state Comptroller Thomas P. DiNapoli, sole trustee of the New York State and Local Employees' Retirement System, provides information on the system, which delivers retirement benefits to many NYSUT School-Related Professionals and other support staff. If you are an ERS member with a question of general interest, email united@nysutmail.org.
For immediate assistance, contact the ERS Call Center toll-free at 866-805- 0990, or 518-474-7736 in the Capital District area.
NYSUT ERS Consultants
Most NYSUT School-Related Professionals* belong to the New York State and Local Employees' Retirement System (ERS). NYSUT ERS consultants are available to help SRP members navigate the retirement system. Consultants can answer questions, provide forms and help members contact the ERS. Contact any one of our consultants for assistance.
*Note: Certified teaching assistants belong to the state Teachers' Retirement System (TRS).