Before the date your first annuity payment becomes due (your retirement effective date), you can elect to receive your annuity as a straight life annuity or elect to have your annuity reduced to nominate a beneficiary under an annuity option.
What are the available annuity options under APERS?
- Straight Life
- Option A60
- Option A120
- Option B50
- Option B75
Straight Life
If you choose the Straight Life option, your monthly annuity will be paid for your lifetime only. When you die, no benefit is payable to a beneficiary. However, if you die within 12 months of retirement, your surviving spouse may be eligible to receive an Option B75 annuity. Otherwise, any balance of employee contributions not paid to you will be refunded to your named contributions beneficiary. If no balance remains, nothing will be payable.
Option A60 and Option A120
Under these annuity options, a monthly annuity will be paid for your lifetime. If you die before receiving 60 (for Option A60) or 120 (for Option A120) monthly payments, your beneficiary will receive the remaining monthly annuity payments, less the temporary annuity (if applicable).
You may name anyone you choose as an Option A60 or Option A120 beneficiary. If you name multiple beneficiaries, the benefit will be divided among them. Please note that a beneficiary cannot be removed except for death or divorce.
Under Option A60, you will receive 98% of the Straight Life annuity amount. Under Option A120, you will receive 94% of the Straight Life annuity amount.
Example: a member selected Option A120 at retirement and died after receiving 47 monthly payments. The beneficiary(ies) will be eligible to receive the remaining 73 monthly payments (less the temporary annuity, if applicable).
Option B50 and Option B75
Under these annuity options, a monthly annuity will be paid for your lifetime. When you die, your beneficiary will receive 50% (Option B50) or 75% (Option B75) of your monthly annuity, less the temporary annuity (if applicable), for the beneficiary’s lifetime.
For these options, your beneficiary must be either your spouse (to whom you have been married for at least six months) or a dependent child 40 years of age or older whom you claimed on your previous year’s federal tax return.
Under Option B50, you will receive 88% of the Straight Life annuity amount, adjusted upward or downward 0.5% for each year difference in age between you and your beneficiary. Under Option B75, you will receive 83% of the Straight Life annuity amount, adjusted upward or downward 0.7% for each year difference in age between you and your beneficiary.
Example: a member selected Option B50. The beneficiary will be eligible to receive 50% of what the member was receiving monthly (less the temporary annuity, if applicable) for the beneficiary’s lifetime. If the member was receiving $1,000.00 monthly, then the beneficiary would receive $500.00 monthly.
| Straight Life | Option A60 | Option A120 | Option B50 | Option B75 | |
|---|---|---|---|---|---|
| Beneficiary | None | Any Person | Any Person | Spouse or Dependent Child Aged 40 or Older | Spouse or Dependent Child Aged 40 or Older |
| Payment Duration | None | Remainder of the 60 months | Remainder of the 120 months | Beneficiary Lifetime | Beneficiary Lifetime |
| Retiree Benefit | 100% of Straight Life Annuity | 98% of Straight Life Annuity | 94% of Straight Life Annuity | 88% of Straight Line Annuity1 | 83% of Straight Life Annuity1 |
| Beneficiary Benefit | None | 100% of Retiree Benefit2 | 100% of Retiree Benefit2 | 50% of Retiree Benefit2 | 75% of Retiree Benefit2 |
2The temporary annuity for non-contributory members is not included.
How-To
To choose an annuity option, you will make the election on your retirement application. You will also list beneficiary information if you choose an option with a beneficiary provision.
Frequently Asked Questions
Can you explain the temporary annuity?
The temporary annuity is a benefit payable to non-contributory members who retire prior to the age of 62. It is payable only to the member and expires when the member turns age 62 or dies.
Can I change my annuity option after retirement?
In some cases, you may be eligible to change your annuity option. You can change your annuity option in the following situations:
| Event | Description |
|---|---|
| Marriage | If you marry and had elected Straight Life, Option A60, or Option A120 at retirement, you may change your annuity option to Option B50 or Option B75, starting six months after your marriage date and ending 12 months after your marriage date. |
| Death of Spouse or Divorce | If your beneficiary dies or you experience a divorce and had elected Option B50 or Option B75, you may change your annuity option to Straight Life, Option A60 or Option A120. |
-OR-
| Event | Election at Retirement | Option Change |
|---|---|---|
| Marriage | Straight Life, Option A60, or Option A120 | Option B50 or Option B75 |
| Death of Spouse or Divorce | Option B50 or Option B75 | Straight Life, Option A60, or Option A120 |
Considerations:
Selecting an annuity option requires that you balance the needs of your personal income with your concern for payment to a beneficiary or beneficiaries after your death. Straight Life offers the highest benefit payable to you, but it does not have a beneficiary provision. Option A60 and Option A120 also allow you to name multiple beneficiaries, whereas Option B50 and Option B75 allow only one beneficiary.
You should consider how long your beneficiary will receive payments after your death. Only Option B50 and Option B75 offer a beneficiary benefit for the recipient’s lifetime.