Tag Archives: Ten Year Certain

Choosing Your Pension Payment Option

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. There’s a lot to consider when choosing a pension payment option, so let’s break this down using an example.

Choosing Your Pension Payment Option

Meet Jane

Jane plans to retire soon and considers whether she should leave a continuing benefit to her husband or grandchildren.

No Beneficiaries

The Single Life Allowance option would provide the maximum monthly benefit payment, but all payments will stop when Jane dies, and nothing will be paid to a beneficiary.

Multiple Beneficiaries, Limited Benefit

For Jane to name both of her grandchildren as beneficiaries, she would have to select either the Five Year Certain or Ten Year Certain option—these pension payment options provide a limited benefit for multiple beneficiaries and wouldn’t reduce her pension much. If Jane dies within five or ten years of retirement, depending on which option she chooses, Jane’s grandchildren would split her pension benefit for the remainder of the five- or ten-year period. However, if Jane lives beyond the five- or ten-year period, her grandchildren would not receive a pension benefit when she dies. (Note: Jane could select one of these options and name just one beneficiary, for example, her husband instead of her grandchildren.)

Single Beneficiary, Lifetime Benefit

Jane’s husband doesn’t have his own pension, so she also considers pension payment options providing a lifetime benefit for a single beneficiary. Under the Joint Allowance — Full or Joint Allowance — Half options, Jane’s husband would receive all or half of her reduced benefit for life, depending on which option she chooses. The same goes for the Pop-Up/Joint Allowance — Full or Pop-Up/Joint Allowance — Half options. While these “pop-up” options reduce the pension a little more, they provide added security—if Jane outlives her husband, her monthly payment will increase to the maximum amount as if she selected the Single Life Allowance option at retirement.

Pension payment amounts are based on the birth dates of both the retiree and their beneficiary. So, if Jane chose one of these options and named one of her grandchildren as her beneficiary, her pension would be much lower than the amounts listed in the graphic.

Things to Consider

As you plan for your own retirement and think about whether to leave a continuing benefit for a beneficiary, 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.

It’s also important to understand whether you can change your beneficiary after you retire. Life circumstances can sometimes change, and if you choose a pension payment option that provides a lifetime benefit, you cannot change your beneficiary. 

Find your NYSLRS retirement plan publication to learn more about pension payment options and how your pension will be calculated. You can also estimate your pension using Retirement Online, and enter different retirement dates and beneficiary birth dates to see how those choices would affect your benefit. When you’re done, print your pension estimate or save it for future reference.

Pension Payment Options: Providing a Limited Benefit for Multiple Beneficiaries

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

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.

When you’re done, print your pension estimate or save it for future reference.

Can You Change Your Beneficiary After You Retire?

That depends. If you choose a pension payment option that provides a lifetime benefit for a beneficiary, you cannot change your beneficiary even if they die before you do. However, if you choose a pension payment option that provides a benefit for a certain period after retirement, you can change your beneficiary after you retire. Learn more about the different pension payment options and whether they allow you to change your beneficiary below.

If your retirement plan provides a one-time lump sum death benefit after you retire, you can also change your beneficiary (or beneficiaries) for that benefit.

Can You Change Your Beneficiary After You Retire?

Available Pension Payment Options

At retirement, you will choose a pension payment option:

  • Single Life Allowance option: Provides the maximum monthly benefit payment to you for the rest of your life. This option does not provide a continuing benefit so you will not select a beneficiary, and all payments stop when you die.
  • Joint Allowance options: Provide a lifetime benefit to a loved one in exchange for a reduction to your monthly benefit payment. After your death, your beneficiary will continue to receive your pension (or part of it, depending on the option you choose) for the rest of their life. If your beneficiary dies before you, your monthly benefit payment remains the same and all payments stop when you die. However, if you choose one of the Popup-Up/Joint Allowance options and your beneficiary predeceases you, your monthly benefit payments will increase to the amount payable under the Single Life Allowance option. For these options, you can only choose one beneficiary, and you cannot change your beneficiary after you retire.
  • Five Year Certain or Ten Year Certain options: Provide a benefit for a certain period after retirement in exchange for a reduction to your monthly benefit payment. If you die within the five- or ten-year period after your retirement (depending on the option you choose), your beneficiary will continue to receive your monthly pension payment for the remainder of the five- or ten-year period. For these options, you can choose more than one beneficiary, and you can change your beneficiary after you retire.

Post-Retirement Death Benefit

Your pension is not your only NYSLRS retirement benefit. Most NYSLRS retirees are eligible to leave a death benefit if they retired directly from payroll or within one year of leaving employment. The post-retirement death benefit is a one-time lump sum payment. For information on how it’s calculated, visit our Death Benefits for Retirees page.

You can change your beneficiary for this benefit at any time, and your beneficiaries for this benefit do not have to be the same as your pension payment option beneficiary.

Manage Your Beneficiaries in Retirement Online

The fastest way to view or update your beneficiaries for your post-retirement death benefit is in Retirement Online.

You should also review the contact information for your beneficiaries so we can find them when needed.