Retiree Death Benefits

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Types of Death Benefits

Retirees can name beneficiaries for the following benefits payable upon the retiree’s death:  

Continuance Payments
  • Continuance – A continuing monthly payment to a beneficiary, often for the lifetime of the beneficiary. The value is based on the retirement option the retiree chose at retirement. See the section below.
Lump Sum Payments

A lump sum payment is a one-time death benefit payment to a beneficiary. The beneficiary can be anyone, including a trust or a charity.

  • $1000 one-time lump-sum death benefit – This benefit is vested.
  • Refund of member account balance – A one-time payment in one lump sum of the balance of the member’s contribution account (= employee contributions + interest – total retirement payments) if the account is not yet exhausted by retirement payments. This is not paid out if the beneficiary receives a continuance.
  • Retirement allowance earned but not yet paid by the retiree’s death – This benefit is pro-rated to cover the amount payable for the portion of the month prior to the retiree’s death.  
  • Refund of prepaid health payments – Healthcare premiums paid in advance for the member or dependents will be refunded to the beneficiary. This benefit is taxable. Beneficiaries will receive a 1099-R form for income reporting purposes.

Death Benefits Are Based on the 5 Retirement Options

At retirement, ACERA members choose one of the five options below. A retired member’s death benefits are based on which option they chose. If they chose a continuance payment option and named an eligible beneficiary, the beneficiary will receive a monthly continuance payment. A member’s only opportunity to name a continuance beneficiary (a beneficiary that receives a continuance) is at the time of retirement. A member’s retirement option selection is permanent, and cannot be changed after retirement.

Retirement Option Beneficiary’s Benefit Upon Retiree’s Death
Unmodified Option

60% continuance of retiree’s allowance at time of death to:

  • Spouse or state-registered domestic partner, married/registered at least 1 year before retirement. Lifetime continuance.
  • Or minor child / children, if no spouse or domestic partner at retirement. Temporary continuance.
    • Can be one child or multiple children. Multiple children will share the collective 60% continuance.
    • Continuance stops at age 18
    • Or continuance stops at age 22 if child maintains full-time enrollment in an accredited school
    • Continuance stops if they marry or register state domestic partner

100% continuance of retiree’s allowance at time of death, if retiree is on a service-connected disability retirement, to:

  • Spouse or state-registered domestic partner, married/registered at time of retirement.
  • Or minor child / children, if no spouse or domestic partner at retirement. Temporary continuance. Same restrictions apply as above.
Option 1 One-time lump sum refund of member account balance. No continuance.
Option 2 100% continuance of retiree’s allowance at time of death
Option 3 50% continuance of retiree’s allowance at time of death
Option 4 Continuance to multiple beneficiaries specified by the retiree

Survivors receiving continuances will continue to receive annual cost of living adjustments to their continuances.