At retirement, you will have a choice between four retirement benefit options. All four options have one thing in common: each will provide you, the member, a benefit for the remainder of your life. The options differ in what happens to the benefit after you pass away.

Maximum

Single-Life Annuity

Under the Maximum benefit option, you will receive full, unreduced benefits. The Maximum benefit is paid monthly for your lifetime and ceases the last day of the month in which you pass away. No further monthly benefits are paid. If you are married at retirement, your spouse must consent to your choice of the Maximum benefit.

For members eligible to retire as an elected official, under the Maximum benefit, if you qualify, your eligible surviving spouse will receive one-half of your benefit amount after your death. A surviving spouse benefit is payable only if you are married for three continuous years prior to your death.

Option A

1/2 Joint and Survivor Annuity

Under this option, you will receive a reduced retirement benefit for life. After your death, one-half of the member’s reduced retirement benefit will be paid to the surviving joint annuitant for his or her lifetime. Your joint annuitant must be a specific person (not a trust, charity, etc.). Option A is two payments for two lifetimes.

Example: $1000 normal gross, maximum monthly benefit. The retiree is age 62 with a joint annuitant who is two years younger. This produces a reduction factor of 92.16 percent. The retiree will receive an approximate gross benefit of $921 each month for their lifetime, and upon their death, the joint annuitant will receive a gross benefit of half or approximately $460 each month for the rest of their lifetime. Reduction factors for specific ages can be found on the Option A Reduction Factors Chart link below.

Option A Reduction Factors Chart

Option B

100% Joint and Survivor Annuity

Under this option, you will receive a reduced retirement benefit for life. After your death, the same reduced monthly gross benefit will be paid to your surviving joint annuitant for his or her lifetime. In this case, the retiree will absorb a larger reduction to their monthly benefit so a joint annuitant can receive the same amount that the retiree once received. The joint annuitant must be a specific person – who is no more than 10 years younger than you, unless that person is your spouse.

Example: $1000 normal gross, maximum monthly benefit. The retiree is age 62 and the joint annuitant is two years younger. This produces a reduction factor of 85.46 percent. Applying the reduction factor, the retiree will receive a monthly gross benefit of approximately $855. When the retiree dies, the joint annuitant will begin receiving that same approximate gross amount of $855 for the rest of their lifetime. Reduction factors for specific ages can be found on the Option B Reduction Factors Chart link below.

Option B Reduction Factors Chart

Option C

Single-Life Annuity with 10-Year Certain Period

Option C is a single life annuity with a 10-year certain. Under this option, you will receive a reduced retirement benefit for life. If you pass away within the first 10 years of benefit payments, payments will be made to your beneficiary(ies) for the balance of the 10-year period. If you live longer than 10 years after your retirement date, no monthly benefits will be paid to the beneficiary(ies) upon your death. Your beneficiary does not have to be a specific person and may be changed at any time during the 10-year period. Also under this option, only the retiree’s age is considered for the reduction factor.

Example: $1000 monthly gross, lifetime benefit. The retiree is age 62. This produces a reduction factor of 97.19 percent. The gross monthly benefit will be approximately $972 for the rest of the retiree’s lifetime. If the retiree passes away in the first 10 years of retirement, the Option C beneficiary(ies) will receive an approximate gross benefit of $972 per month until the 10-year mark. Reduction factors for specific ages can be found on the Option C Reduction Factors Chart link below.

Option C Reduction Factors Chart

MARRIED MEMBERS

You must retire, and name your spouse, under Option A or B if you are married at retirement – unless your spouse consents to you choosing a different option. Your spouse’s consent is also required if you choose someone other than your spouse as your joint annuitant. If you are divorced or your spouse is deceased, you must provide proof of the divorce or death at retirement.

CAN I CHANGE MY OPTION? 

Your chosen retirement benefit option may not be changed on or after the effective retirement date. However, if your joint annuitant – under Option A or B passes away before you do, you must contact OPERS and provide a certified death certificate. At that point, you will begin receiving benefits under the Maximum benefit option. No other person may be substituted.

A member’s joint annuitant cannot be changed after retirement. However, beneficiaries under Option C can be changed at any time after retirement.

JOINT ANNUITANT AND BENEFICIARY….WHAT IS THE DIFFERENCE?

Joint Annuitant – A specific person (not a trust, charity, etc.) who you designate to receive a lifetime retirement benefit under Option A or B once you pass away. A joint annuitant designation cannot be changed after retirement.

Beneficiary – A person or entity you designate to receive accumulated contributions, death benefit or retirement benefit under Option C. Unlike a joint annuitant, a beneficiary does not have the right to a lifetime benefit. The beneficiary is not required to be a specific person (can be a trust, charity, etc.), and may be changed at any time by submitting a new beneficiary designation form.