Tag Archives: ordinary death benefit

Know Your Benefits: Death Benefits

If you die while still on the job, your beneficiary may be eligible to receive a death benefit. Here is an overview of member death benefits.  

(If you are retired, visit our Death Benefit page for retirees to learn about available benefits.)

Know your death benefits

Types of Death Benefits

Most members who die while they’re still working will leave their beneficiaries what’s called an ordinary death benefit. The benefit is a lump sum payment usually equal to one year of your earnings per year of service, up to a maximum of three years, but the calculation of the death benefit can be different if you’re in a special retirement plan. Please visit our Death Benefits page to see which calculation applies to you. Generally, to qualify for the ordinary benefit, you must have at least one year of service credit and your death must occur while you are on the public payroll. Check your retirement plan booklet for other qualifying circumstances.

Some members who die because of an on-the-job accident (not due to their own willful negligence) may leave their beneficiary an accidental death benefit. If paid to a surviving spouse or dependent parent, the benefit is a lifetime pension. For Employees’ Retirement System (ERS) Tier 4, 5 and 6 members, the benefit is 50 percent of your earnings from your last year of service. For a majority of other members, the benefit is 50 percent of your final average earnings (less any workers’ compensation benefit). There is no minimum service credit requirement to qualify for the accidental benefit.

Death benefits vary by tier and retirement plan, so check your retirement plan for specific benefit and eligibility information and contact us if you have questions.

Reporting a Death

NYSLRS cannot pay out any death benefits until after we are notified of a member’s death and have a certified copy of the member’s death certificate. That’s why it’s so important to talk with your family now about your benefits and how to report your death to NYSLRS. Survivors can report a member’s death using our online form.

Update Your Beneficiaries

In most cases (unless beneficiaries are determined by law, as in the case of accidental death benefits), your death benefit will be paid to the last beneficiaries you designated, so it’s important to be sure yours are up to date. Your beneficiaries are listed in your Retirement Online account and on your Member Annual Statement. You can update your beneficiary information using Retirement Online.

Divorce Affects Other NYSLRS Benefits

signing divorce documents

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, 5 and 6 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.

Loans

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.

Refunds

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.

The easiest way to do this is by using Retirement Online, our secure, self-service web application. You can also submit a Designation of Beneficiary form.

Death Benefits For ERS Members

Among the most important benefits a NYSLRS membership provides are death benefits. When you’re covered by a death benefit, your beneficiary may receive a payment on your behalf at your death.

Death benefits can vary by tier and retirement plan, so for the purpose of today’s post, let’s focus our attention on the Employees’ Retirement System (ERS) Tier 2, 3, 4, 5 and 6 members in regular plans. (If you’re in a special 20- or 25-year plan or are a Tier 1 member, please review your plan publication to learn more about your death benefits.)

The Ordinary Death Benefit

You’re eligible for the ordinary death benefit when you have one year of service credit. Your beneficiary would receive this benefit if you died while working for a public employer.

  • After one year of service, the ordinary death benefit is equal to your last year’s salary.
  • After two years of service, the benefit equals two times your last year’s salary.
  • After three or more years of service, the benefit equals three times your last year’s salary.

Post Retirement Death Benefits ERS Regular-Plans

The Post-Retirement Death Benefit

Your beneficiary may also be eligible for a post-retirement death benefit if you retire directly from your employer’s payroll or within one year of leaving covered employment.

  • During your first year of retirement, the post-retirement death benefit is 50 percent of your ordinary death benefit payable at retirement.
  • During your second year of retirement, the benefit is 25 percent of your ordinary death benefit.
  • During your third year and thereafter, the benefit is 10 percent of the ordinary death benefit that would have been payable at age 60 (if any) or at retirement, whichever was earlier.

There may be other death benefits available in your retirement plan. Please read the Death Benefit section in your plan publication for more information. If you have any questions about death benefits, please email us using our secure email form.