January 2013 Issue
December 18, 2012

TRS: Update your death beneficiary information

Source: NYSUT United

Q: Does my death beneficiary have to be related to me? Can I name more than one?

A: You can name any number of primary and contingent death beneficiaries — and they do not need to be related to you. The start of a new year is a good time to check your Teachers' Retirement System beneficiary information.

If you don't update your death beneficiary, your loved ones could end up paying the price. By law, the New York State Teachers' Retirement System must pay any death benefit due to the current beneficiary(ies) on file.

To bring home the point, TRS delegates shared the following poignant stories at a "Lessons Learned" workshop held at the state TRS convention:

  • An active member had never updated his beneficiary designation. When he died, TRS had to pay the death benefit to his ex-girlfriend, instead of his current spouse. 
  •  A deceased member's wife called to ask if she would receive a benefit. When TRS looked up the records, the member had listed his parents as beneficiaries when he first joined TRS and had not updated his designation when he got married or they had children. After TRS told the wife there would be no death benefit payable to her, she spoke to the in-laws who told her they would not help her out. They said if their son had wanted her to be the beneficiary, he would have changed his paperwork.

Don't let this happen to you and your loved ones. Make sure your designation is up to date so your wishes will be carried out. Events such as marriage, divorce and death will change your beneficiary coverage needs, so it's important you review your designations annually and notify TRS if changes are necessary.

You can review your beneficiary information by checking your annual benefit profile or through your online "MyNYSTRS account" via www.nystrs.org.

To designate or change your beneficiary, print a Designation of Beneficiary form from the TRS website or request one from the TRS Hotline at 800-782-0289. The form must be properly notorized.

Keep in mind TRS cannot make death benefit payments directly to minor children. You may want to consult with an attorney to find out how best to carry out your wishes and provide for children.

Q: How much is the death benefit? Is it effective immediately?

A: For those in Tiers 2-6, you are covered by an in-service death benefit after one year of service. Under paragraph 2, the in-service death benefit is generally equal to one year's salary after a year of service, and it increases to a maximum of three years' salary after three or more years of service. After age 60, the benefit is reduced by 4 percent per year, up to a maximum reduction of 40 percent at age 70. The post-retirement benefit amount depends on how soon after retirement your death occurs. For more information, go to www.nystrs.org.