Types of Retiree Death Benefits
Retirees can name beneficiaries for the following benefits payable upon the retiree’s death:
- A continuance payment. The value is based on the retirement option you nominated at retirement.
- A one-time lump-sum death benefit. This benefit is vested. Currently, the maximum benefit provided is $1,000.
- Any retirement allowance earned but not yet paid to the retiree at the time of 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.
- A refund of member account balance (= employee contributions + interest – total retirement payments) if not yet exhausted by retirement payments. This is not paid out if the beneficiary receives a continuance.
- A refund of prepaid health payments that will not be used. Any healthcare premiums paid in advance for the member or dependents will be refunded to the beneficiary. These benefits are taxable. Beneficiaries will receive Form 1099® for income reporting purposes.