Plan B


Plan B provides members with 6 survivorship options: Option 1 allows you to possibly leave a lump-sum payment, but no monthly benefit, to a beneficiary(ies) after your death; and Options 2-4 allow you to provide a continuing monthly benefit to a beneficiary(ies) after your death.

If you select a survivorship plan, the amount of your monthly benefit will be reduced actuarially to allow for the lump-sum payment or monthly payment for life to your designated beneficiary(ies).

The amount of the reduction in monthly benefits (cost of the option) depends on your age, the age of your beneficiary(ies). If you choose a beneficiary (s) who is more than 10 years younger than you, who is not your spouse, your benefit may be subject to the required minimum distribution rules of the Internal Revenue Service. These rules regulate the amount of your pension that can be distributed to a survivor. For more information, please visit our website or call the TRS office. The age of the beneficiary(ies) will influence the amount of your retirement benefit under Plan B Option 2, 2 Pop-up, and 4. For example, the younger your beneficiary(ies), the smaller your monthly benefit will be (the cost of the option is greater).

If you select one of the survivorship plans of retirement you cannot change your beneficiaries after retirement except as specifically provided by law (see the Changes in Plan of Retirement and Beneficiary Designation section in this booklet).

 

Plan B: Option 1
Possible Lump-Sum Payment, but No Monthly Benefit to a Beneficiary

Option 1 allows you to possibly leave a lump-sum amount to a beneficiary(ies) in return for a slightly reduced lifetime monthly benefit (from the maximum amount). Under this plan, the total of your contributions and interest at the time of your retirement will be reduced each month by only the portion of your total gross benefit made up of your contributions and interest. At your death, all monthly benefits stop. However, any remaining contributions and interest will be refunded to your designated beneficiary(ies) or your estate.

In most cases, your contributions and interest will be depleted within 10 to 14 years after retirement, but your benefits will continue throughout your life. You may change your beneficiary designation at any time after retirement. If you have named your spouse as a beneficiary and you become divorced, you may change your plan of retirement.

 

Plan B: Option 2
Monthly Benefit to a Beneficiary

Option 2 offers a reduced monthly lifetime benefit based on your age and the age of your beneficiary(ies). This option guarantees that at your death, your named beneficiary(ies), if living, will receive a lifetime benefit comparable to 100% of your benefit amount at the time of your death in accordance with IRS regulations and the ages of your beneficiary(ies).

You may designate multiple beneficiaries to receive lifetime monthly benefits and specify the percentage to be paid to each beneficiary. If 2 or more beneficiaries are designated, and one predeceases you, the percentage of available benefits you selected for the remaining beneficiary(ies) will not be adjusted. Should your beneficiary(ies) predecease you, your monthly benefit will remain under Option 2 unless you are eligible to change your plan of retirement and/or beneficiary(ies) as provided by law (see the Changes in Plan of Retirement and Beneficiary Designation section).

 

Plan B: Option 2 Pop-Up
Monthly Benefit to a Beneficiary

The Option 2 Pop-Up offers a reduced monthly lifetime benefit based on your age and the age of your beneficiary. If you predecease your beneficiary, your beneficiary will receive a lifetime benefit equal to the amount you were receiving at the date of your death. If your beneficiary predeceases you, your monthly benefit will increase to the original Maximum Plan amount, plus all increases awarded to you during retirement. Under this option, you may only designate one beneficiary.

 

Plan B: Option 3
Monthly Benefit to a Beneficiary

Option 3 offers a reduced monthly lifetime benefit based on your age and the age of your beneficiary(ies). This benefit provides that at your death, your named beneficiary(ies), if living, will receive a lifetime benefit comparable to 50% of your benefit amount at the time of your death in accordance with IRS regulations and the ages of your beneficiary(ies).

You may designate multiple beneficiaries to receive lifetime monthly benefits and specify the percentage to be paid to each beneficiary. If 2 or more beneficiaries are designated, and one predeceases you, the percentage of available benefits you selected for the remaining beneficiary(ies) will not be adjusted. Should your beneficiary(ies) predecease you, your monthly benefit will remain under Option 3 unless you are eligible to change your plan of retirement and/or beneficiary(ies) as outlined in the section Changes in Plan of Retirement and Beneficiary Designation).

 

Plan B: Option 3 Pop-Up
Monthly Benefit to a Beneficiary

The Option 3 Pop-Up offers a reduced monthly lifetime benefit based on your age and the age of your beneficiary. If you predecease your beneficiary, your beneficiary will receive a lifetime benefit equal to 50% of the amount you were receiving at the date of your death. If your beneficiary predeceases you, your monthly benefit will increase to the original Maximum Plan amount, plus all increases awarded to you during retirement. Under this option, you may only designate one beneficiary.

 

Plan B: Option 4
Monthly Benefit to a Beneficiary

Option 4 offers a reduced monthly lifetime benefit in exchange for the flexibility to designate a specific dollar amount or a specific percentage of your monthly benefit to be paid to your beneficiary(ies) after your death. The beneficiary benefits you specify under this plan cannot cause your monthly benefit to be reduced below 50% of the maximum benefit available to you. If multiple beneficiaries are designated and 1 or more beneficiaries predecease you, the dollar amounts or the percentages are not adjusted. Beneficiaries also receive a prorated share of any cost-of-living increases you received up to the date of death

Monthly benefits under Option 4 are also calculated actuarially using an amount of survivor's benefit specified by the member. TRS will calculate your benefits under Option 4 and provide an estimate of your monthly benefit upon request.


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