|
Shortcuts
|
Pension Options Available
to
PERS and TPAF Members upon Retirement
Effective
July 1, 2001, there are nine retirement allowance options available
to members of the Public Employees' Retirement System and the
Teachers' Pension and Annuity Fund. In addition to the five pre-existing
payment options (Maximum Option, and Options 1, 2, 3, and 4),
there are four additonal pension options that are available:
Option A, Option B, Option C, and Option D.
Scroll down this page to become familiar
with each option; or, click on the option of interest to you in
the above chart to see the specific features of that option in
more detail.
Option A
At the time of retirement, the member names a beneficiary
on the Application for Retirement Allowance. If the member
should pass away after retiring, the named beneficiary receives
100% of the member's monthly penison allowance for life. If the
beneficiary dies first, the member's pension increases to the
amount payable under the Maximum Option, which the member receives
for the remainder of his or her lifetime.
Option B
Option B pays the beneficiary, whom the member chooses at
retirement, 75% of the retired member's monthly pension allowance
upon the member's death. If the beneficiary precedes the retiree
in death, the member's pension allowance reverts to the increased
amount offered under the Maximum Option, for the lifetime of the
member.
Option C
This option pays 50% of the member's monthly pension allowance
to the beneficiary upon the retired member's death. If the beneficiary
predeceases the member, the member's monthly allowance increases
to the amount calculated for the Maximum Option, which the member
receives for life.
Option D
Option D pays a lifetime monthly pension allowance to the beneficiary
named by the member equal to 25% of the monthly pension allowance
paid to the retired member, should the member die after retiring.
If the beneficiary dies before the retired member, the amount
of the monthly pension allowance paid to the member would revert
to that calculated for the Maximum Option.
Under all of the pension options added under Chapter 120 P.L. 2001,
(Option A, Option B, Option C, and Option D), the member can name
only one beneficiary, and that beneficiary can not be changed
once the retirement becomes "due and payable". ( The pension becomes
"due and payable" 30 days after the retirement date, or 30 days
after the Board of Trustees approves the retirement, whichever
occurs later.) Proof-of-age must be submitted for both the member
and the named beneficiary. Finally, as explained above, if the
named beneficiary dies before the member, the member's monthly
pension allowance increases to the amount payable under the Maximum
Option.
See also Age Limits on Non-spouse Beneficiaries (below).
BACK TO TOP
Option
A Features
- The member names one beneficiary
on the Application for Retirement Allowance when
applying for retirement.
- The chosen beneficiary must be
an individual, not a charity, an institution, or an estate.
- Proof
of age for both the member and the beneficiary must be submitted
in order to process the retirement.
- If the member names someone other
than a spouse as a beneficiary, the chosen beneficiary cannot
be more than ten years younger than the member, as determined
by Internal Revenue Service regulations (See also Age Limits on Non-spouse Beneficiaries*.)
- Once the pension is "due and payable",
the named beneficiary cannot be changed. The pension becomes
"due and payable" 30 days after the retirement date, or 30 days
after the Board of Trustees approves the retirement, whichever
occurs later.
- If the member dies after retiring,
the named beneficary receives 100% of the member's monthly pension
allowance.
- If the named beneficiary dies
before the member, the member's monthly pension allowance is
increased to the amount payable under the Maximum Option, for
the member's life.
Option
B Features
- The member names one beneficiary
on the Application for Retirement Allowance when
applying for retirement.
- The chosen beneficiary must be
an individual, not a charity, an institution, or an estate.
- Proof
of age for both the member and the beneficiary must be submitted
in order to process the retirement.
- If the member names someone other
than a spouse as a beneficiary, the chosen beneficiary cannot
be more than 19 years younger than the member, as determined
by Internal Revenue Service regulations. (See also Age Limits on Non-spouse Beneficiaries*.)
- Once the pension is "due and payable",
the named beneficiary cannot be changed. The pension becomes
"due and payable" 30 days after the retirement date, or 30 days
after the Board of Trustees approves the retirement, whichever
occurs later.
- If the member dies after retiring,
the named beneficary receives 75% of the member's monthly pension
allowance.
- If the named beneficiary dies
before the member, the member's monthly pension allowance is
increased to the amount payable under the Maximum Option, for
the member's life.
Option
C Features
- The member names one beneficiary
on the Application for Retirement Allowance when
applying for retirement.
- The chosen beneficiary must be
an individual, not a charity, an institution, or an estate.
- Proof
of age for both the member
and the beneficiary must be submitted in order to process the
retirement.
- Once the pension is "due and payable",
the named beneficiary cannot be changed. The pension becomes
"due and payable" 30 days after the retirement date, or 30 days
after the Board of Trustees approves the retirement, whichever
occurs later.
- If the member dies after retiring,
the named beneficary receives 50% of the member's monthly pension
allowance.
- If the named beneficiary dies
before the member, the member's monthly pension allowance is
increased to the amount payable under the Maximum Option, for
the member's life.
Option
D Features
- The member names one beneficiary
on the Application for Retirement Allowance, when
applying for retirement.
- The chosen beneficiary must be
an individual, not a charity, an institution, or an estate.
- Proof
of age for both the member
and the beneficiary must be submitted in order to process the
retirement.
- Once the pension is "due and payable",
the named beneficiary cannot be changed. The pension becomes
"due and payable" 30 days after the retirement date, or 30 days
after the Board of Trustees approves the retirement, whichever
occurs later.
- If the member dies after retiring,
the named beneficary receives 25% of the member's monthly pension
allowance.
- If the named beneficiary dies
before the member, the member's monthly pension allowance is
increased to the amount payable under the Maximum Option, for
the member's life.
Maximum
Option Features
- The Maximum Option pays the highest
monthly pension allowance of all of the options available, for
the lifetime of the member.
- There is no monthly
pension allowance paid to a beneficiary when the member
dies.
- The member does name a beneficiary
on the Application for Retirement Allowance.
- If the member dies before receiving
the balance of his or her contributions to the pension system
in the form of the monthly pension allowance, the balance
of contributions is paid to the named beneficiary, along with
the last check.
- Proof
of age is required for the member only.
Option
1 Features
- The member
names a beneficiary on the Application for Retirement
Allowance.
- More than
one beneficiary may be chosen, and the beneficiary may be a
person, a charity, an institution, or the member's estate.
- The beneficiary
can be changed at any time.
- A retirement
reserve is calculated for the member at retirement, based on
the member's retirement allowance and life expectancy. The retirement
reserve is the amount expected to be paid to the member in retirement
for the member's lifetime.
- If the
member dies before receiving the entire retirement reserve,
the amount of money remaining in the retirement reserve is paid
to the beneficiary (or beneficiaries).
- Proof
of age
is required for the member only.
|
For Example: |
$100.000 Reserve fund |
|
- |
$ 60,000 Paid to retiree |
|
= |
$ 40,000 Paid to beneficiary
after member's death |
OR
|
| |
$100,000 Reserve fund |
|
- |
$124,000 Paid to retiree |
|
= |
$ - 0 - paid to beneficiary
after member's death since the entire Reserve fund was paid
out to the member. |
Option
2 Features
- The member names one beneficiary
on the Application for Retirement Allowance, when
applying for retirement.
- The chosen beneficiary must be
an individual, not a charity, an institution, or an estate.
- If the member names someone other
than a spouse as a beneficiary, the chosen beneficiary cannot
be more than ten years younger than the member, as determined
by Internal Revenue Service regulations. (See also Age Limits on Non-spouse Beneficiaries*.)
- Proof
of age for both the member and the beneficiary must be submitted
in order to process the retirement.
- Once the pension is "due and payable",
the named beneficiary cannot be changed. The pension becomes
"due and payable" 30 days after the retirement date, or 30 days
after the Board of Trustees approves the retirement, whichever
occurs later.
- If the member dies after retiring,
the named beneficary receives 100% of the member's monthly pension
allowance.
- If the named beneficiary dies
before the member, the member continues to receive the same
monthly pension allowance, not an increased amount as in Option
A.
Option
3 Features
- The member names one beneficiary
on the Application for Retirement Allowance, when
applying for retirement.
- The chosen beneficiary must be
an individual, not a charity, an institution, or an estate.
- Proof
of age for both the member
and the beneficiary must be submitted in order to process the
retirement.
- Once the pension is "due and payable",
the named beneficiary cannot be changed. The pension becomes
"due and payable" 30 days after the retirement date, or 30 days
after the Board of Trustees approves the retirement, whichever
occurs later.
- If the member dies after retiring,
the named beneficary receives 50% of the member's monthly pension
allowance.
- If the named beneficiary dies
before the member, the member continues to receive the same
monthly pension allowance, not an increased amount as under
Option C.
Option
4 Features
- The member names a beneficiary
on the Application for Retirement Allowance, when
applying for retirement.
- The member can choose one or more
than one beneficiary.
- The beneficiary must be an individual,
not a charity, an institution, or an estate.
- Proof
of age for both the member
and the beneficiary must be submitted in order to process the
retirement.
- Once the pension is "due and payable",
the named beneficiary cannot be changed. The pension becomes
"due and payable" 30 days after the retirement date, or 30 days
after the Board of Trustees approves the retirement, whichever
occurs later.
- If the member dies after retiring,
the named beneficary receives an amount which is pre-determined
by the member and which is less than the member's monthly pension
allowance.
- If the named beneficiary dies
before the member, the member continues to receive the same
monthly pension allowance, not an increased amount as under
Options A, B, C or D.
- When the dollar amount specified
for the beneficiary's pension upon the member's death is more
than half of the member's monthly allowance, age restrictions
apply if the beneficiary is a non-spouse. (See also Age Limits on Non-spouse Beneficiaries*.)
Age Limits on Nonspouse Beneficiaries
For all options, you can name your spouse* as your beneficiary regardless of your spouse's age. For Options 1, 3, C, or D, you can name someone other than your spouse as beneficiary regardless of age.
For Options 2 and A (100% to beneficiary), if you are naming a beneficiary who is not your spouse, Internal Revenue Service regulations restrict the age of your beneficiary to no more than 10 years younger than you.
For Option B (75% to beneficiary) you can name a non-spouse who is no more than 19 years younger than you.
If you name a non-spouse beneficiary under Option 4, if the dollar amount of your beneficiary's pension is more than half of your allowance, restrictions on your beneficiary's age apply.
*Since the Internal Revenue Service is a federal agency, a civil union partner or domestic partner as defined under New Jersey State law does not qualify as a spouse under these circumstances and would be subject to the age limitations described.
BACK
TO TOP
BACK
TO HOME PAGE
|