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Retiree Death Benefits Based on the 5 Retirement Options

At retirement, ACERA members choose one of the five options below. The member’s death benefits are based on which option they chose. The selection is permanent, and cannot be changed after retirement.

Glossary
  • Beneficiary: a person who receives benefits. An ACERA retiree’s beneficiary is a person the retiree designates to receive their death benefits upon the retiree’s death.
  • Continuance: is a continuing monthly payment to a beneficiary or beneficiaries after an ACERA retiree dies.
  • Continuance beneficiary: the beneficiary an ACERA member names to receive a continuance upon the retiree’s death. Members’ only opportunity to name a continuance beneficiary is at the time of retirement.
  • Lump-sum payment: A one-time death benefit payment to a beneficiary. The beneficiary can be anyone, including a trust or a charity.

 

Unmodified Option

Maximum Retirement Allowance

60% Continuance to Beneficiary

Retirement Allowance

Benefit paid to retiree

Maximum allowance provided for retiree’s lifetime, based on age, service credit, and final average salary.

Beneficiary’s Benefit

Benefit paid to beneficiary upon retiree’s death

60% Monthly Continuance
  • To spouse or state-registered domestic partner with whom retiree was married/registered at least 1 year before retirement will receive a lifetime monthly continuance of 60% of retiree’s allowance at time of death.
    • If the retiree was on a service-connected disability retirement, the benefit is 100% of retiree’s retirement allowance at the time of death for a spouse or state-registered domestic partner that was married to the member at time of retirement for any amount of time.
  • Or to minor children: monthly continuance of 60% (or 100% for member who retired on service-connected disability) of retiree’s allowance at time of death
    • 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
Or Lump-Sum Payment to Anyone
  • To beneficiary other than an eligible spouse/state-registered domestic partner or minor child: a one-time, lump-sum payment of retiree’s accumulated contributions and interest, minus total retirement payments already paid. If the retiree dies after the first 3-5 years of retirement, the lump sum amount will already be exhausted.
If continuance beneficiary dies before retiree

Retiree can name a new beneficiary, but only for a lump-sum payment, not for a continuance.

 

Option 1

Lump Sum Benefit to Beneficiary

No Monthly Continuance

Retirement Allowance

Benefit paid to retiree

Slightly lower allowance for retiree’s lifetime than under unmodified option.

Beneficiary’s Benefit

Benefit paid to beneficiary upon retiree’s death

One-Time Lump-Sum Payment

Lump sum payment = employee contributions + interest – annuity portion of allowance already paid

Beneficiary Can Be
Anyone
Special Considerations
  • This option may leave a higher lump-sum balance to be paid to the beneficiary than under Unmodified Option because contribution balance is paid to the retiree at a slower rate. This option extends the time it takes under the unmodified Option (3–5 years) to exhaust the balance of contributions and interest to a range of 10–12 years.
  • If all contributions and interest have been paid as of retiree’s death, there will be no balance remaining for the beneficiary.
  • Retiree may name a new beneficiary at any time.
If beneficiary dies before retiree Retiree can name a new beneficiary

 

Option 2 

100% Continuance to Beneficiary

Retirement Allowance

Benefit paid to retiree

  • Lower allowance for retiree’s lifetime than under unmodified option
  • Amount of reduction based on beneficiary’s age at time of member’s retirement
Beneficiary’s Benefit

Benefit paid to beneficiary upon retiree’s death

100% Monthly Continuance

Lifetime monthly allowance of 100% of retiree’s allowance at time of death

Beneficiary Can Be
Any one person
Special Considerations
  • Under California law, retiree’s spouse/state-registered domestic partner may have certain rights over any other designated beneficiary.
  • If named beneficiary dies before retiree, retiree’s benefit will not be increased.
  • Retiree’s allowance may be sharply reduced if beneficiary is considerably younger than retiree.
If beneficiary dies before retiree Retiree can name a new beneficiary, but only for a lump-sum payment of retiree’s accumulated contributions and interest, minus monthly payments already paid. No continuance will be available.
Option 3

50% Continuance to Beneficiary

Retirement Allowance

Benefit paid to retiree

  • Lower allowance for retiree’s lifetime than under unmodified option
  • Amount of reduction based on beneficiary’s age at time of member’s retirement
  • Retiree’s retirement allowance is more than Option 2 because the beneficiary will get less than in Option 2.
Beneficiary’s Benefit

Benefit paid to beneficiary upon retiree’s death

50% Monthly Continuance

Lifetime monthly allowance of 50% of retiree’s allowance at time of death.

Beneficiary Can Be
Any one person
Special Considerations
  • Under California law, retiree’s spouse/state-registered domestic partner may have certain rights over any other designated beneficiary.
  • If named beneficiary dies before retiree, retiree’s benefit will not be increased.
  • Retiree’s allowance may be sharply reduced if beneficiary is considerably younger than retiree.
If beneficiary dies before retiree Retiree can name a new beneficiary, but only for a lump-sum payment of retiree’s accumulated contributions and interest, minus monthly payments already paid. No continuance will be available.

 

Option 4

Split Continuance to Multiple Beneficiaries

Retirement Allowance

Benefit paid to retiree

  • Lower allowance for retiree’s lifetime than under the unmodified option
  • Amount of reduction based on youngest named beneficiary’s age at time of member’s retirement
Beneficiaries’ Benefit

Benefit paid to beneficiaries upon retiree’s death

Retiree Specifies $ or % Continuance to Multiple Beneficiaries
Beneficiaries Can Be
Anyone
Special Considerations
  • Under California law, retiree’s spouse/state-registered domestic partner may have certain rights over any other designated beneficiary.
  • If named beneficiaries die before retiree, retiree’s benefit will not be increased.
  • Retiree’s allowance may be sharply reduced if youngest beneficiary is considerably younger than retiree.
  • May not be provided if retirement allowance is based on disability retirement.
If beneficiary dies before retiree Retiree can name a new beneficiary, but only for a lump-sum payment of retiree’s accumulated contributions and interest, minus monthly payments already paid. No continuance will be available.

 

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