Types of Death Benefits
Retirees can name beneficiaries for the following benefits payable upon the retiree’s death:
- 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|
60% continuance of retiree’s allowance at time of death to:
100% continuance of retiree’s allowance at time of death, if retiree is on a service-connected disability retirement, to:
|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||Retiree Specifies Continuance Amount to One or More Beneficiaries|
Survivors receiving continuances will continue to receive annual cost of living adjustments to their continuances.
Further details on each of the 5 Retirement Options can be found on our Applying to Retire page.
Information about death benefits for death before retirement can be found on our summary Death Benefits page.
* For these lump sum death benefits, rather than receiving payment in one lump sum, the beneficiary may elect to receive the payment in monthly installments over a period of up to ten years, with interest paid on the unpaid balance at ACERA’s annual inflation assumption rate, which is currently 2.75% per annum (compounded monthly).