Your NYSLRS pension will provide you with a monthly benefit for the rest of your life. When you apply for retirement, you’ll have the option to choose the maximum amount payable or a reduced benefit in exchange for possibly continuing payments to a beneficiary upon your death. In this post, we’ll explore the Five Year Certain and Ten Year Certain pension payment options which provide a limited benefit for multiple beneficiaries.
Five and Ten Year Certain Pension Payment Options
In exchange for a permanent reduction in your monthly pension payment, the Five Year Certain and Ten Year Certain options provide a limited benefit to one or more beneficiaries after you die.
If you die within five or ten years after your retirement, payments in the same amount as you were receiving will be paid to your beneficiaries for the remainder of the five- or ten-year period. However, if you live beyond the five- or ten-year period, your beneficiaries will not receive a pension benefit when you die.
For example, let’s say you choose the Five Year Certain option. If you die two years after retiring, your beneficiary will receive your monthly pension payment for three years. Or, if you choose the Ten Year Certain option and die after two years, your beneficiaries will receive your monthly pension payment for eight years. In either case, your beneficiary would receive the same amount you were receiving. If you designate your spouse as your beneficiary, they would be eligible to receive 50% of your cost-of-living adjustment.
While these options don’t provide a lifetime benefit for your beneficiary, they do have advantages you may want to consider. With these options, you can:
- Name multiple beneficiaries.
- Change your beneficiaries at any time within the five- or ten-year period.
Other Pension Payment Options
The Single Life Allowance provides the maximum monthly pension payment to you for the rest of your life. However, this option does not provide a continuing benefit. All payments will stop when you die, and nothing will be paid to a beneficiary.
Some pension payment options provide a lifetime benefit for a single beneficiary.
Things to Consider
When choosing your pension payment option, you may want to consider both your spouse’s and your:
- Financial needs (for instance, whether you have a mortgage, unpaid loans or other monthly payments).
- Other sources of retirement income (for example, Social Security or savings).
- Options for continuing benefits (for example, whether your retirement plan includes a death benefit or if you have life insurance).
- Age and health at retirement.
You only have 30 days after the last day of your retirement month to change your option. After that date, you cannot change your option for any reason.
Estimate Your Pension in Retirement Online
Most members can use Retirement Online to create a pension estimate based on the most up-to-date salary and service information we have on file. You can enter different retirement dates, beneficiaries and pension payment options to see how they affect your potential benefit.
- Sign in to Retirement Online.
- Look under My Account Summary section.
- Click Estimate my Pension Benefit button.
When you’re done, print your pension estimate or save it for future reference.