At retirement, you must elect one of the payment options described on page 16. On average, the payment options are mathematically equal to one another from the perspective of LGERS, based on assumptions recommended by actuaries. Each option is calculated so its total value is the same as the value of the other options to you and the beneficiary you name (if any) to receive a monthly payment after your death. The monthly payment amounts will differ based on the age of the beneficiary you select, if any.

Considering Your Options

First, decide whether you need a payment option that provides a monthly benefit to a beneficiary after your death. If you do not select one of these options, all of your retirement benefits will be used to provide you with a lifetime monthly payment that stops at your death.

Your choice of payment options is personal and should take into account your needs during retirement and the needs of a dependent, if any, after your death. Neither the payment plan selected by a co-worker nor the one selected by the largest number of retirees should have any effect on your personal decision.

Permanent Decision

Your retirement selection is locked in when the first payment becomes normally due and the first benefit payment date has occurred except under one of the following two conditions: 

  • If you select an option that provides a monthly benefit to your spouse as a beneficiary after your death (Option 2, 3, 6-2 or 6-3) and later become divorced from that spouse. 
  • If you are rehired in a position covered by LGERS and contribute to your new account for at least three years.
Tab/Accordion Items

When you retire with a service retirement benefit, your basic benefit is the maximum allowance and is calculated under the formula here. If you retire early, your maximum allowance is calculated using the same formula, which is then reduced for early retirement. In either case, you will receive your allowance for as long as you live. All monthly payments stop at your death.

  • You receive reduced monthly payments for life. 
  • After you die, your monthly survivor beneficiary receives the same amount monthly for life.

  • You receive reduced monthly payments for life which are slightly larger than the payments in Option 2.
  • After you die, half of your payment continues to your monthly survivor beneficiary for life.

  • You receive reduced monthly payments for life (a larger reduction than under Option 2). 
  • After you die, your monthly survivor beneficiary receives the same amount monthly for life. 
  • However, if your beneficiary dies before you do, your monthly payments increase to the amount payable under the maximum allowance

  • You receive reduced monthly payments for life (a larger reduction than under Option 3). 
  • After you die, half of your payment continues to your monthly survivor beneficiary for life. 
  • However, if your beneficiary dies before you do, your monthly payments are increased to the amount payable under the maximum allowance.

 

 

It is important to note that if you select a benefit payment option that names a beneficiary, you should immediately notify the Retirement Systems if that person dies before you. 

NOTE: Under Options 2, 3, 6-2 and 6-3, you may name only one beneficiary to receive a monthly survivor benefit after your death. You may not change your survivor beneficiary after you retire except under one of the following circumstances: 

  • If you named your spouse as survivor beneficiary at the time of retirement and later become divorced from that spouse. 
     
  • If you return to employment covered under LGERS and contribute to a new retirement account for at least three years. 
     
  • If you chose Option 2 or 3 at retirement and designated your spouse as survivor beneficiary, and this spouse dies before you, and you remarry, you may request to nominate your new spouse as your beneficiary within 90 days of your remarriage under the same option you chose at retirement. Contact our office and we will mail you a letter outlining the documents we need to make the change. You must file this redesignation with LGERS within 90 days of your remarriage. 

    Your new benefit will be reduced based on your age and the age of your spouse at the time of the change. The benefit payable to you will be the benefit you received before the death of your previous spouse, additionally reduced to cover your new spouse as beneficiary.
Tab/Accordion Items

  • You receive larger monthly payments than you would otherwise be entitled to receive until you are eligible for Social Security at age 62. 
  • Beginning the month after the month of initial entitlement for Social Security age 62 benefits, your monthly payments will be reduced to an amount that is less than what you would otherwise be entitled to receive. Nevertheless, your reduced retirement payments after age 62, plus your allowance from the Social Security Administration, should be approximately the same amount as the inflated payment you received from LGERS before age 62.
  • The actual amount of your retirement payments both before and after age 62 will be based on the estimate of benefits you provide to us from the Social Security Administration before your retirement.

 All monthly payments stop at your death. The reduction in your monthly retirement payments after age 62 allows LGERS to recover the additional amounts you received before age 62. 

Any percentage increase you are granted in your retirement benefit before age 62 will be applied to the additional benefit you are receiving at that time. However, when you reach age 62, your retirement benefit will be reduced to the original amount promised after age 62 plus the percentage increases (not the dollar amount of increases) granted before age 62.

This page was last modified on 09/10/2024