We’ve written here before about how divorce affects your NYSLRS pension, what a DRO is and why it’s required. However, NYSLRS members have other benefits besides their pensions. Divorce and DROs may affect some of them as well.
Ordinary Death Benefit
As with your pension, a DRO may direct you to designate your ex-spouse as a beneficiary for some portion of your ordinary death benefit. You should file the DRO with NYSLRS as soon as it’s officially accepted by the court. We will prepare a custom beneficiary form that complies with the DRO. Also be sure to choose additional beneficiaries for any remainder of the benefit and submit your changes to NYSLRS.
Post-Retirement Ordinary Death Benefit
Most Tier 2, 3, 4 or 5 members of the Employees Retirement System (ERS) are covered by a post-retirement ordinary death benefit. A DRO may direct you to designate your ex-spouse as a beneficiary for some portion of the benefit. You should file the DRO with NYSLRS as soon as it’s officially accepted by the court. Be sure to contact us to choose additional beneficiaries as allowed by the DRO.
NYSLRS members who meet eligibility requirements can borrow a certain percentage of their contribution balance. DROs may be written to prohibit members from taking future loans.
Outstanding loan balances at retirement reduce retirees’ pension benefits. Unless a DRO specifically provides that the ex-spouse’s share of the pension be calculated without reference to outstanding loans, the ex-spouse’s portion will also be reduced if a NYSLRS loan is not paid off before retirement.
Occasionally, NYSLRS may refund a member’s contributions because of a tier reinstatement, membership withdrawal, membership transfer or excess contributions. If the member is divorced and NYSLRS has a DRO on file, the DRO will determine whether a portion of the refund must go to the ex-spouse. Generally, if the DRO doesn’t mention a contributions refund, the member receives the full amount.
Keeping Your Ex-Spouse as Beneficiary
A divorce, annulment or judicial separation removes a member’s former spouse as beneficiary of certain death benefits and retirement options, except as provided by the divorce judgment or decree, or a DRO. So, if you have gone through a divorce, annulment or judicial separation and you do NOT have a DRO, you must resubmit your beneficiary designation to NYSLRS to retain your former spouse as a beneficiary.