Retirement
Payment Options
Single Life Benefit
A single life
benefit provides a monthly benefit for your lifetime. There is no continuing
income for your spouse or beneficiary, except that if you die before the first
60 monthly payments have been made, your spouse or beneficiary will receive any
outstanding payments until a total of 60 payments have been made. With this
benefit option your monthly income equals your total monthly benefit less any
reduction for early retirement (if applicable). The
example below illustrates
how to calculate a single life benefit.
For
additional information about a single life benefit, please see Article
6.6.
Joint and Survivor Benefit
If you are
married when you retire, you may want a benefit option that provides an income
to your spouse after you die (this payment option is also available if you are
single). The following three joint and survivor benefit options are available.
Joint and survivor factors are listed in Table 7.
50% Joint and Survivor
Benefit
With this
benefit option you receive a monthly benefit for life and, if you die before
your spouse or other designated beneficiary, he or she receives 50% of that
amount for his or her life. Your monthly income is your total monthly benefit
less the appropriate reduction for early retirement (if applicable), less the
appropriate reduction for the survivor benefit. The
example on page 45 illustrates
how to calculate this joint and survivor option.
66-2/3%
Joint and Survivor Benefit
With this
benefit option you receive a monthly benefit for life and, if you die before
your spouse or other designated beneficiary, he or she receives 66-2/3% of that
amount for his or her life. Your monthly income is your total benefit less the
appropriate reduction for early retirement (if applicable), less the appropriate
reduction for the survivor benefit. The
example below illustrates
how to calculate this joint and survivor option.
100% Joint and Survivor Benefit
With this
benefit option you receive a monthly benefit for life and, if you die before
your spouse or other designated beneficiary, he or she receives 100% of that
amount for his or her life. Your monthly income is your total monthly benefit
less the appropriate reduction for early retirement (if applicable), less the
appropriate reduction for the survivor
benefit. The
example below illustrates
how to calculate this joint and survivor option.
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Single
Life Benefit You retire at age 62 under special early retirement
with a total monthly benefit of $2,000.00. You elect a single life
benefit:
Total Monthly Benefit =
Monthly Benefit
$2,000.00 = $2,000.00
In
this example, your $2,000.00 total monthly benefit is not reduced because there
is no reduction for a survivor benefit. This monthly income is payable for your
life. However, if you die sometime during the first five years of retirement,
any remaining guaranteed payments would be made to your beneficiary. After all
remaining guaranteed payments have been made to your beneficiary, the monthly
benefit ceases. For example, if you died three years after your retirement
effective date (36 monthly payments), your beneficiary receives the 24 remaining
guaranteed benefits. After that, no monthly benefit is paid.
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50% Joint and Survivor
Benefit
You retire at age 62 under special early retirement with a total monthly benefit of $2,000.00. Your spouse is two years younger than you and you elect a 50% joint and survivor benefit:
Total Monthly Benefit x Joint and Survivor
Factor = Monthly Benefit
$2,000.00 x .870 =
$1,740.00
$1,740.00 per month for your lifetime
$870.00 per
month for your surviving spouse’s lifetime In this example, your $2,000.00 total monthly benefit is
reduced by $260.00 to provide 50% of your monthly income for your surviving
spouse’s lifetime.
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66-2/3%
Joint and Survivor Benefit
You retire at age 62 under special early retirement with a total monthly benefit of $2,000.00. Your spouse is two years younger than you and you elect a 66-2/3% joint and survivor benefit:
Total Monthly Benefit x Joint and Survivor
Factor = Monthly Benefit
$2,000.00 x .834 =
$1,668.00
$1,668.00 per month for your lifetime
$1,112.00 per
month for your surviving spouse’s lifetime
In this example, your $2,000.00 total monthly benefit is
reduced by $332.00 to provide 66-2/3% of your monthly income for your surviving
spouse’s lifetime.
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100% Joint and Survivor
Benefit
You retire at age 62 under special early retirement with a total monthly benefit of $2,000.00. Your spouse is two years younger than you and you elect a 100% joint and survivor benefit:
Total Monthly Benefit x Joint and Survivor
Factor = Monthly Benefit
$2,000.00 x .770 =
$1,540.00
$1,540.00 per month for your lifetime
$1,540.00 per
month for your surviving spouse’s lifetime
In this example, your $2,000.00 total monthly benefit is
reduced by $460.00 to provide 100% of your monthly income for your surviving
spouse’s lifetime.
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Pop-Up Benefit
If you begin
receiving one of the joint and survivor benefits and your spouse or other
designated beneficiary pre-deceases you, your monthly income is increased to the
amount that would have been payable with a single life benefit on your
retirement effective date. This increase is effective for the month following
your spouse or other designated beneficiary’s death.
Similarly, if
you and your spouse divorce after you begin receiving one of the joint and
survivor benefits, and your spouse agrees in a qualified domestic relations
order (QDRO) to relinquish all of his or her rights to your retirement benefits,
your benefit is increased to the amount that would have been available under a
single life benefit on your retirement effective date. This increase is
effective for the month following the effective date in the provision of the
QDRO that specifies the relinquishment.
If you receive
either of these pop-up benefits, there is no five year guarantee (no survivor
benefits to any beneficiary after your death).
For
additional information about the pop-up benefit, please see Article
6.5 and Article
6.9.
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