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The 5 Retirement Allowance Payment Options
Plus the Death Benefits Available Under Each Option

At retirement, you will complete an Election of Retirement Allowance on which you will choose one of the five retirement options. Your selection is permanent, and cannot be changed after ACERA has received your signed, completed retirement election—so it’s important to understand your benefits and your beneficiary(ies)’ benefits under each option.

Unmodified Option: Provides the Maximum Monthly Lifetime Benefit

Benefit paid to retiree

Maximum allowance provided for retiree’s lifetime, based on age, service credit, and final average salary.

Benefit paid to beneficiary on retiree’s death
  • For spouse/state-registered domestic partner with whom retiree was married/registered at least one year before retirement, lifetime monthly allowance of 60% of retiree’s allowance at time of death.
  • If the retiree was on a service-connected disability retirement, the benefit is 100% of retiree’s retirement allowance at the time of death for a spouse or state-registered domestic partner that was married to the member at time of retirement for any amount of time.
  • For minor child(ren), collective monthly allowance of 60% (or 100% for member who retired on service-connected disability) of retiree’s allowance at time of death, payable to the minor child(ren) until the minor marries/registers or reaches age 18 (or age 22 if enrolled as a full-time student in an accredited school).
  • For a beneficiary other than a spouse/state-registered domestic partner or minor child, a one-time, lump-sum payment of retiree’s accumulated contributions and interest, minus monthly retirement payments already paid.
If named beneficiary dies before retiree
  • Upon retiree’s death, alternate or newly named beneficiary will only receive lump-sum payment of retiree’s accumulated contributions and interest, minus monthly payments already paid.

 

Option 1: Lump Sum Benefit to Beneficiary / No Monthly Continuance

Benefit paid to retiree

Slightly lower allowance for retiree’s lifetime than under unmodified option.

Benefit paid to beneficiary upon retiree’s death

One-time, lump-sum payment of retiree’s accumulated contributions and interest, minus the annuity portion of monthly payments already paid. May leave a higher lump-sum balance to be paid to beneficiary than under unmodified Option because contribution balance is paid to retiree at a slower rate. Designate any beneficiary (not limited to spouse or minor child).

If named beneficiary dies before retiree

Upon retiree’s death, alternate or newly named beneficiary will receive lump-sum payment of retiree’s accumulated contributions and interest, minus the annuity portion of monthly payments already paid.

Special considerations
  • This option extends the time it takes under the unmodified Option (three to five years) for the retiree to receive a refund of all contributions and interest to a range of 10 to 12 years. If all contributions and interest have been paid as of retiree’s death, there will be no balance remaining for the beneficiary.
  • Retiree may name a new beneficiary at any time.

 

 Option 2: 100% Joint and Survivor

Benefit paid to retiree Lower allowance for retiree’s lifetime than under unmodified option, with amount of reduction based on named beneficiary’s age at time of member’s retirement.
Benefit paid to beneficiary upon retiree’s death Lifetime monthly allowance of 100% of retiree’s allowance at time of death.
If named beneficiary dies before retiree Upon retiree’s death, alternate or newly named beneficiary will only receive lump-sum payment of retiree’s accumulated contributions and interest, minus monthly payments already paid.
Special considerations
  • When retiring, you must have an insurable interest in the life of each beneficiary you named when selecting this option.  Please note, under California law, retiree’s spouse/state-registered domestic partner may have certain rights over any other designated beneficiary.
  • If named beneficiary dies before retiree, retiree’s benefit will not be increased.
  • Retiree’s allowance may be sharply reduced if beneficiary is considerably younger than retiree.

 

 Option 3: 50% Joint and Survivor

Benefit paid to retiree Lower allowance for retiree’s lifetime than under unmodified option, with amount of reduction based on named beneficiary’s age at time of member’s retirement. Reduction smaller than under option 2 because continuance to beneficiary is less.
Benefit paid to beneficiary upon retiree’s death Lifetime monthly allowance of 50% of retiree’s allowance at time of death.
If named beneficiary dies before retiree Upon retiree’s death, alternate or newly named beneficiary will only receive lump-sum payment of retiree’s accumulated contributions and interest, minus monthly payments already paid.
Special considerations
  • When retiring, you must have an insurable interest in the life of each beneficiary you named when selecting this option.  Please note, under California law, retiree’s spouse/state-registered domestic partner may have certain rights over any other designated beneficiary.
  • If named beneficiary dies before retiree, retiree’s benefit will not be increased.
  • Retiree’s allowance may be sharply reduced if beneficiary is considerably younger than retiree.

 

 Option 4: Retiree Specifies Benefit

Benefit paid to retiree Lower allowance for retiree’s lifetime than under the unmodified option, with amount of reduction based on youngest named beneficiary’s age at time of member’s retirement. Amount to be provided to beneficiary upon retiree’s death.
Benefit paid to beneficiary upon retiree’s death Retiree specifies dollar amount or percentage of allowance to be paid to named beneficiaries.
If named beneficiary dies before retiree Upon retiree’s death, alternate or newly named beneficiary will receive lump-sum payment of retiree’s accumulated contributions and interest, minus monthly payments already paid.
Special considerations
  • Retiree may name multiple beneficiaries.
  • When retiring, you must have an insurable interest in the life of each beneficiary you named when selecting this option.  Please note, under California law, retiree’s spouse/state-registered domestic partner may have certain rights over other designated beneficiaries.
  • If named beneficiaries die before retiree, retiree’s benefit will not be increased.
  • Retiree’s allowance may be sharply reduced if youngest beneficiary is considerably younger than retiree.
  • May not be provided if retirement allowance is based on disability retirement.

 

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