Retirement Benefit Payment Options

Your Retirement Payment Options

There are several important factors to consider before selecting your retirement option:

•  The Unmodified Option provides you with the maximum Service Retirement allowance available to you.  If you select options 1-4, then you will receive a reduced lifetime monthly allowance.  The Unmodified Option has certain restrictions regarding the payment of a survivor’s allowance upon your death.
• With options 2, 3, and 4, you cannot change your designated beneficiary after you have started receiving your monthly retirement allowance.
•  In addition, because of community property laws in the State of California, your spouse, ex-spouse, your Qualified Domestic Partner or Ex-Qualified Domestic Partner may have certain rights that supersede those of other designated beneficiaries.
•  Benefit payment options are irrevocable after receipt of your first retirement payment.

NOTE: each option provides you with a monthly lifetime benefit.

You must choose your retirement payment option at the time you file for your retirement, and once you begin receiving your retirement allowance your option cannot be changed or modified.

The Unmodified Option

This option provides you with the maximum retirement allowance available to you.  It also provides for a continuation of 60% of your allowance to your Eligible Spouse, Qualified Domestic Partner or Eligible Child upon your death.  This continuance is restricted to your Eligible Spouse, Qualified Domestic Partner or Eligible Child only, and cannot be paid to a trust.

There are two ways for your spouse or Qualified Domestic Partner to qualify for a continuance under the Unmodified Option:

1. Your spouse or registered domestic partner is considered an Eligible Spouse or Domestic Partner if you have been married or registered as a Qualified Domestic Partner at least one year prior to your date of retirement and you remain continuously married to that spouse or registered to that domestic partner up to the time of your death.  If you divorce that spouse or domestic partner after retirement and later remarry that same spouse or re-register with that same domestic partner, he or she would not qualify as an Eligible Spouse or Qualified Domestic Partner unless he or she would qualify under paragraph 2 below.
   
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2. Your spouse or registered domestic partner is considered an Eligible Spouse or Qualified Domestic Partner if you have been continuously married or registered as a Qualified Domestic Partner at least two years prior to the date of your death and are married to that spouse or registered to that Qualified Domestic Partner at the time of your death, and your spouse or Qualified Domestic Partner is at least 55 years old.

If you do not have an Eligible Spouse or Qualified Domestic Partner, the 60% continuance may be paid to your Eligible Child upon your death. An Eligible Child is an unmarried child under the age of 18, or an unmarried full-time student under the age of 22 (this includes adopted children).

If you do not have an Eligible Spouse, Qualified Domestic Partner or Eligible Child at the time of your death, your designated beneficiary will receive a lump sum refund of any of your remaining member contributions.  Under the Unmodified Option, you may change your designated beneficiary at any time, but that will not affect the 60% continuance payable to an Eligible Spouse or Qualified Domestic Partner or Eligible Child.

Other Payment Options

You may choose one of the following forms of payment in place of the Unmodified Option.  These options reduce your retirement allowance to provide benefits for your survivors/beneficiary(ies) upon your death. These options may be appropriate for a prospective retiree with a beneficiary who does not qualify for a continuance allowance under the Unmodified Retirement Option, or for a member with a short life expectancy.

NOTE: A trust cannot be named as a beneficiary to receive a continuance allowance.

Option 1 – Cash Refund Annuity

You will receive a reduced monthly allowance until your death.  At the time of your death, your designated beneficiary will receive a refund of any of the remaining member contributions in your account.  Under this option, you may change your designated beneficiary at any time.

Option 2 – 100% Joint and Survivor Annuity

You will receive a reduced monthly allowance until your death.  At the time of your death, your designated beneficiary will receive the same monthly allowance for the for the remainder of his or her lifetime.  You cannot change your designated beneficiary after you have started receiving your monthly retirement allowance. Please note that pursuant to IRS regulations, any named beneficiary who is not your spouse and who is more than 10 years younger than you will receive less than 100% as a future continuance.  The continuance percentage will be actuarially determined at the time of your retirement.

Option 3 – 50% Joint and Survivor Annuity

You will receive a reduced monthly allowance until your death.  At the time of your death, your designated beneficiary will receive half of your monthly allowance for the remainder of his or her lifetime.  You cannot change your designated beneficiary after you have started receiving your monthly retirement allowance.

Option 4

Under Option 4 you may have multiple designated beneficiaries and may select other survivor payment percentages if approved in advance by the Retirement Board.  OCERS will request an actuarial study and bring the results and your request before the Board of Retirement before this option is approved.  You cannot change your designated beneficiaries after you have started receiving your monthly retirement allowance.

NOTE: Specific details and restrictions apply.  Please consult a Member Services Specialist for more information at (714) 558-6200.

Additional Information

For more information on your retirement payment options please call OCERS at (714) 558-6200 and ask for a Member Services Specialist.

Available Brochure: Retirement payment options