If an APERS member is vested and dies before retirement, APERS can provide survivor benefits if the deceased member meets certain requirements:
- At the time of death, the member has credit for at least five years of actual service (in most cases, this means credit for five years of full-time employment in a covered position).
- At the time of death, the member has not begun receiving retirement benefits (whether or not the member had already filed for retirement).
ELIGIBILITY FOR SURVIVOR BENEFITS
If a member dies meeting the minimum requirements listed above, the member's
- dependent children, or
- dependent parents
may be eligible for a survivor benefit in the form of a monthly annuity.
To be eligible for a survivor benefit, a spouse must have been married to the deceased member for at least six months prior to the date of death.
The minimum yearly survivor benefit for an eligible spouse is 10% of the member's covered compensation at the time of death. To determine the correct benefit, APERS will calculate an annuity as if the member had retired on the date of death under benefit option B-75. The spouse will then receive a monthly annuity based on the B-75 calculation or on the 10% minimum, whichever is greater.
An eligible spouse will receive the annuity for life if, on the date of death, the deceased member had already acquired at least 20 years of actual service.
If, on the date of death, the member had not yet qualified for full retirement or acquired at least 20 years of actual service, the spouse will receive the monthly annuity until the spouse dies or remarries, at which time the annuity will cease except under the following condition:
An eligible spouse will continue to receive the monthly annuity as long as the spouse is caring for dependent children.
To be eligible for a survivor benefit, the deceased member's children must be qualified as dependents. Children are considered dependent until they die, get married, or reach age 18, except in the case of full-time students or those ruled legally incompetent.
Children who remain continually enrolled as students in an accredited secondary school, vocational school, college, or university can still be considered dependent until reaching age 23. Any students over the age of 18 must verify their dependent status at the beginning of each semester by filing a Verification of Dependent Survivor Status form with APERS. This form must be certified by a parent or guardian and by an authorized representative of the school.
Any child who has been ruled physically or mentally incompetent by an Arkansas court can be considered dependent as long as such incompetence exists. Survivor benefits for eligible dependent children will be calculated as follows:
- If there are one or two dependent children, each will receive an annuity of 10% of the member's covered compensation at the time of death or an equal share of $150 per month, whichever is greater.
- If there are three or more dependent children, each will receive an annuity that is an equal share of 25% of the member's covered compensation at the time of death or an equal share of $150 per month, whichever is greater.
When a child ceases to qualify as a dependent, his or her annuity will terminate and the benefits payable to any remaining dependent children will be recalculated as necessary.
Parents are eligible for survivor benefits only under the following conditions:
- There must be no spouse or dependent children who are eligible for benefits.
- The parents must qualify as dependents of the deceased member by having relied on the member for at least one-half of their support.
Each eligible parent will receive an annuity of either 10% of the member's compensation at the time of death or an equal share of $150 per month, whichever is greater.
REFUNDABLE MEMBER CONTRIBUTIONS
Contributory members and members who purchase allowable service (e.g., military service) contribute funds to their retirement accounts that are refundable under certain circumstances. As a result, these members are required to name one or more beneficiaries for these funds. If a member dies before acquiring five years of actual service, then the named beneficiaries can request a refund of any member contributions or purchase payments credited to the deceased member's account. Employer contributions are never refundable.
REFUND IN LIEU OF SURVIVOR BENEFITS
A spouse or dependent parents who are eligible for a survivor annuity may elect instead to take a lump-sum payment of the deceased member's refundable contributions (if any) under the following conditions:
- At the time of the member's death, there must be only one party eligible for survivor benefits, either the spouse or one or both dependent parents (who can file jointly). There can be no dependent children also eligible for a benefit.
- The surviving spouse or dependent parents requesting the refund must also be the deceased member's named beneficiaries.
A refund under this provision will terminate all claims for monthly survivor benefits on behalf of the deceased member.
(This post was adapted from various sources, originally published on 1/25/16.)