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Retiring members may choose from five retirement options. All plans provide you a lifetime payment and a $5,000 death benefit to your beneficiary or estate. Each plan guarantees you and/or your beneficiary will receive an amount equal to your total contributions.
Maximum Plan - This plan pays you the highest monthly benefit with the lowest guarantee to the beneficiary. If you do not receive retirement benefits equal to your total contributions, the remaining balance will be paid to your beneficiary or estate.
Option 1 - This plan pays slightly less than the maximum, but generally provides a larger lump sum payment to your beneficiary because Option 1 depletes your contributions by only the annuity portion of your monthly benefit. It will take 12 to 17 years for the contribution balance to be exhausted depending on your age at retirement.
Option 2 - This option provides you a reduced monthly benefit with payments continuing to your beneficiary, at the same monthly rate for the remainder of the beneficiary's life. The beneficiary for this plan may be any person named at the time of retirement and cannot be transferred to another person if the beneficiary precedes you in death. If your beneficiary dies before you, your monthly retirement benefit and any amount due at you death will be calculated as if you had selected the maximum retirement allowance. IRS regulations restrict naming a beneficiary other than a spouse.
Option 3 - This option is similar to Option 2, except only 50 percent of your monthly retirement benefit is continued to your beneficiary. Under this plan, you receive a higher monthly benefit than provided by Option 2, because the obligation to the beneficiary is less. If your beneficiary dies before you, your monthly retirement benefit and any amount due at your death will be calculated as if you had selected the maximum retirement allowance.
Option 4 - This option pays you for life but also guarantees at least 120 payments (payments for 10 years) will be made. If you die before 120 payments are made, monthly benefits will continue to a beneficiary. Payments to your beneficiary will eventually stop (10 years after your retirement date). The beneficiary for this plan does not have to be the spouse.
Note: The $5,000 death benefit will always be paid at the death of the member. Under Options 2, 3 and 4, the death benefit will be made to the beneficiary even if the monthly benefits are to continue. Retirees who elect Option 2, 3 or 4 may name an alternate beneficiary for the $5,000 death benefit.