Survivor Benefits

Survivor Benefits Before Retirement

 

 

If you are vested and die before retirement, whether or not you are married, your surviving spouse or beneficiary can choose how to receive the Pre-Retirement Death Benefit. Your surviving spouse or your beneficiary can choose to receive either the Lump Sum Death Benefit or the Five Year Survivor Pension. Alternatively, your surviving spouse may choose to receive the spouse’s share under the Joint & Survivor Pension.

Lump Sum Death Benefit. This benefit is equal to $500 times the number of Benefit Units you earned as of your death, not to exceed $5,000.

Five Year Survivor Pension. This benefit is equal to your accrued pension as of your death, unreduced because of your age, and payable for five years (60 months). Alternatively, this benefit can be paid as a lump sum payment equal to 85% of your accrued pension times 60.

Joint & Survivor Pension. This benefit is equal to the same amount that your surviving spouse would receive under the Joint & Survivor Pension, as described herein. Your age at death will determine the amount of the reduction for early commencement and also when the monthly payments begin to your surviving spouse.

The following chart illustrates the date on which your spouse may begin receiving survivor benefits if you die before retirement, and what factors will be used to calculate the amount of your spouse’s benefit:

Participant’s Age at Date of Death:

Age Factor from Early Retirement Percentage Table:

Spouse May Begin Receiving Benefits:

At least 55

Based on age at death

First day of the month after the date of death

At least 45, but less than 55

Factor at age 55

First day of the month after the date of death

Less than 45

Factor at age 55

First day of the month after Participant would have reached age 45

 

To summarize, if you are vested and not married, your beneficiary may choose to receive the Pre-Retirement Death Benefit either as the Lump Sum Death Benefit or as the Five Year Survivor Pension. If you are vested and married, your surviving spouse may choose to receive the Pre-Retirement Death Benefit either as the Lump Sum Death Benefit, the Five Year Survivor Pension, or the spouse’s share under the Joint & Survivor Pension.


EXAMPLES OF PRE-RETIREMENT DEATH BENEFIT

Jim earned 20 years of Vesting Service and 20 Benefit Units. In 2014, Jim passed away at age 48. Based on a rate of $90.00, his accrued pension at his death is $1,800.00 per month.

If Jim is not married, his beneficiary can choose to receive the Pre-Retirement Death Benefit either as the:

Lump Sum Death Benefit   OR

Five Year Survivor Pension

$5,000 ($500 x 20 Years)

$1,800.00 per month for 60 months

OR

$91,800.00 Lump Sum ($1,800.00 x 60 months x 85%). This can be rolled over into another retirement account

If Jim is married, his surviving spouse can also choose the spouse’s share under the Joint & Survivor Pension. If Jim’s surviving spouse is also age 48, then his spouse is eligible to choose:

Lump Sum Death Benefit

OR

Five Year Survivor Pension   OR

Joint & Survivor

$5,000 ($500 x 20 Years)

$1,800.00 per month for 60 months

$821 per month for life beginning the first month after his death and payable for the spouse's life:
$1,800 x 80% (surviving spouse share) x 64% (early commencement) x 89% (joint & survivor factor)

OR

$91,800 Lump Sum ($1,800 x 60 months x 85%). This can be rolled over into another retirement account

Of course, in these examples, the Beneficiary/Survivor would probably not select the Lump Sum Death Benefit, since it is so much lower than the other options.