Educate Yourself
PARTIAL LUMP-SUM OPTION PLAN (PLOP)
DISTRIBUTION EXAMPLE
Before electing a PLOP distribution, TRS encourages you to consider the following:
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How much will you receive in a lump-sum distribution?
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How much will your monthly benefit be reduced?
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Will the reduced monthly benefit be sufficient to cover living expenses throughout retirement?
If you elect a PLOP distribution, you will receive an actuarially reduced monthly benefit. Your age at retirement, along with your beneficiary's age (if you choose a survivorship option), is used to determine the reduction in your benefit if you elect a PLOP distribution.
Example:
A 60-year-old member with a $3,300 monthly retirement benefit under Plan A elects to take a lump-sum distribution at retirement. The member is eligible to choose a PLOP distribution, in $1,000 increments, from $4,000 - $118,000 (1 x $3,300 = $4,000 rounded up to the nearest $1,000; and 36 x $3,300 = $118,000 rounded down to the nearest $1,000). This member chooses a $50,000 lump-sum distribution.
Under the Maximum Plan, the cost per $1,000 of the lump-sum distribution for a member retiring at age 60 is $7.38 per month, as per the benefit reduction table. This member's monthly cost for a $50,000 payment is $369 (50 x $7.38).
To determine the reduced benefit, subtract $369 from $3,300. The member would receive $2,931 per month as a result of electing the PLOP distribution.
