Retirement PERS and TPAF Pension Options Public …

1 Retirement . PERS and TPAF Information for: Pension Options Public Employees' Retirement System (PERS). Teachers' Pensions and Annuity Fund (TPAF). ESTIMATING YOUR benefits, life insurance benefits, and income from Options other than the Maximum Retirement ALLOWANCE other sources such as Social Security benefits, in- Under Options A, B, C, or D you receive a small- vestments, etc. If you are within two years of Retirement , you er monthly benefit than that provided under the may obtain an estimate of your Retirement ben- When you apply for Retirement , you will have to Maximum Option so that, upon your death, your efits online using the Member Benefits Online choose one of nine ways to receive your Retirement beneficiary will receive a lifetime monthly Pension . System (MBOS) available on the New Jersey Di- benefits. Please be sure you understand the different The percentage of reduction is based on the life vision of Pensions & Benefits (NJDPB) website at: payment Options available to you, because once you expectancies of both you and your beneficiary at Estimates obtained have made your choice and your Retirement be- the time of your Retirement and the option selected.

2 Through MBOS provide the most accurate informa- comes due and payable (usually when your first Therefore, the younger your beneficiary, the greater tion available by using the service and salary infor- check is issued), you cannot change your pay- the percentage of reduction in your benefit. Your ben- mation currently posted to your account. ment option. eficiary under these Options must be an individual. If you die before receiving monthly Retirement ben- You may not designate a charity, institution, your es- You may also call the NJDPB's Automated Informa- efits equal to the amount that you paid into the re- tate, etc. as a beneficiary. tion System at (609) 292-7524 to hear an estimate of your Retirement benefits over the phone. Please tirement system while you were employed (including Option A - 100 Percent to Beneficiary - have your Pension membership and Social Security interest on those contributions), the balance of your Increase to Maximum Option numbers available when you call.

3 Contributions will be paid to your named beneficiary, Option A, a 100 percent joint and survivor benefit, regardless of which option you choose. Any group life Note: Telephone estimates are not available for provides a lifetime monthly payment to you. If your insurance benefits available to your beneficiary(ies). members of the PERS Prosecutors Part, Workers' beneficiary is living at the time of your death, your are also unaffected by your Pension option selection. Compensation Judges, or PERS Law Enforcement beneficiary will receive 100 percent of your monthly Officers (LEOs). Maximum Option - No Pension Retirement allowance for life. If your beneficiary dies If you are more than two years from Retirement , Benefit to a Beneficiary before you, your Retirement allowance will increase to you may calculate your own Retirement allowance us- The Maximum Option, a single-life annuity, is the the Maximum Option.

4 You can name only one benefi- ing the online Retirement estimate calculator on the highest amount payable and provides a Retirement ciary for this benefit and the beneficiary can never be NJDPB website. benefit to you for the remainder of your life. If you are changed after Retirement . not concerned with providing either a lump-sum ben- Pension PAYMENT Options . efit or monthly income to another person after your When planning for Retirement , you must be familiar death, the Maximum Option may be the most appro- with the Pension payment Options available to you priate payment choice for you. The benefit payments from the Retirement system. You should also consider continue for your lifetime only. Upon your death, ben- your financial needs in Retirement , your health, your efits end and your survivors do not receive a Pension beneficiary's health, the need to provide survivor allowance.

5 Page 1 February 2018 Fact Sheet #5. This fact sheet is a summary and not intended to provide all information. Although every attempt at accuracy is made, it cannot be guaranteed. Retirement PERS and TPAF Pension Options Option B 75 Percent to Beneficiary Option 1 Reducing Retirement Under Options 2, 3, or 4 you receive a smaller Increase to Maximum Option Reserve to a Beneficiary monthly benefit than that provided under the Maximum Option so that, upon your death, your Option B, a 75 percent joint and survivor benefit, Option 1 provides a lifetime monthly payment to you. beneficiary will receive a lifetime monthly Pension . provides a lifetime monthly payment to you. If your Your Retirement allowance is reduced from what you The percentage of reduction is based on the life beneficiary is living at the time of your death, your could collect under the Maximum Option. It is also expectancies of both you and your beneficiary at beneficiary will receive 75 percent of your monthly different from the Maximum Option in that it may pro- the time of your Retirement and the option selected.

6 Retirement allowance for life. If your beneficiary dies vide a lump-sum payment to your beneficiary after Therefore, the younger your beneficiary, the greater before you, your Retirement allowance will increase to your death. At the time of your Retirement , the amount the percentage of reduction in your benefit. Your ben- the Maximum Option. You can name only one benefi- expected to be paid to you in Retirement benefits over eficiary under these Options must be an individual. ciary for this benefit and the beneficiary can never be your lifetime is calculated. This is called your retire- You may not designate a charity, institution, your es- changed after Retirement . ment reserve. If you die before you receive monthly tate, etc. as a beneficiary. Retirement benefits equal to your Retirement reserve, Option C 50 Percent to Beneficiary . your beneficiary is entitled to the balance.

7 The bal- Option 2 100 Percent to Beneficiary . Increase to Maximum Option ance will be paid in a lump sum or the beneficiary Permanent Reduction Option C, a 50 percent joint and survivor benefit, may request payment in equal monthly payments Option 2, a 100 percent joint and survivor benefit, provides a lifetime monthly payment to you. If your over five, 10, 15, or 20 years, or as a life annuity. provides a lifetime monthly payment to you. If your beneficiary is living at the time of your death, your You may name more than one beneficiary for this beneficiary is living at the time of your death, your beneficiary will receive 50 percent of your monthly option and you can change your beneficiary at any beneficiary will receive 100 percent of your monthly Retirement allowance for life. If your beneficiary dies time. Your beneficiary may be a person, a charity, an Retirement allowance for life.

8 You can name only one before you, your Retirement allowance will increase to institution, or your estate. beneficiary for this benefit and the beneficiary can the Maximum Option. You can name only one benefi- For example, if your monthly Retirement allowance is never be changed after Retirement . This is similar to ciary for this benefit and the beneficiary can never be $2,000 and your Retirement reserve is $230,400, your Option A except that if your beneficiary dies before changed after Retirement . beneficiary would be entitled to the following payment you, you will continue to receive the reduced retire- Option D 25 Percent to Beneficiary ment allowance you had been receiving under this depending on when you died (16 or 120 months after Increase to Maximum Option Retirement as shown below). option. Option D, a 25 percent joint and survivor benefit, Option 3 50 Percent to Beneficiary.

9 Provides a lifetime monthly payment to you. If your Retirement Reserve $230,400 Permanent Reduction beneficiary is living at the time of your death, your Retirement Benefits Paid $32,000 Option 3, a 50 percent joint and survivor benefit, pro- beneficiary will receive 25 percent of your monthly (death at 16 months) vides a lifetime monthly payment to you. If your bene- Retirement allowance for life. If your beneficiary dies Beneficiary Benefit $198,400 ficiary is living at the time of your death, your benefi- before you, your Retirement allowance will increase to ciary will receive one-half of your monthly Retirement the Maximum Option. You can name only one benefi- allowance for life. You can name only one beneficiary ciary for this benefit and the beneficiary can never be Retirement Reserve $230,400. to receive this benefit and the beneficiary can never changed after Retirement .

10 Retirement Benefits Paid $240,000 be changed after Retirement . This is similar to Option (death at 120 months) C except that if your beneficiary dies before you, you Beneficiary Benefit $0 will continue to receive the reduced Retirement allow- ance you had been receiving under this option. Since the Retirement reserve is based on your retire- ment allowance and your life expectancy, your own reserve may be much different than this example. Fact Sheet #5 February 2018 Page 2. Retirement PERS and TPAF Pension Options This fact sheet is a summary and not intended to provide all information. Although every attempt at accuracy is made, it cannot be guaranteed. Option 4 Choice of Amount to Pension Benefit to Beneficiary Upon Death of Retiree Beneficiary Permanent Reduction 100% of 75% of 50% of 25% of If the preceding payment Options do not meet your Retirement Retirement Retiement Retirement financial needs, you may want to consider this option.