You may choose monthly benefit payments under one of six options that differ according to the death benefits provided. You select an option when you file an application for retirement benefits.
You may not change your option once your first benefit payment is issued. It is important to become familiar with the differences in the six options so that you can make the choice that best suits you. Even though IPERS does not provide financial planning counseling, IPERS can explain the various options to you and provide you an estimate for each option to help you decide.
As a member, no matter which option you choose, monthly benefits are paid for your life. Payments after your death are as follows.
NOTE: For Options 4 and 6, you will designate a contingent annuitant instead of a beneficiary. A contingent annuitant is someone who may receive monthly payments after your death.
Retirement Benefit Payment Options
Option
Description
Important to Note
Death Payments Payable: Lump Sum Benefit
Death Payments Payable: Monthly Benefit
Option 1: Annuity With Fixed Lump-Sum Survivor Benefit
Monthly benefit for life.
You specify a death benefit amount, in $1,000 increments, to be paid in a lump sum to your beneficiary(ies) when you die.
After retirement, you cannot change the death benefit amount.
The death benefit amount cannot exceed your total contributions plus interest.
Yes
No
Option 2: Annuity With Variable Decreasing Lump-Sum
Monthly benefit for life.
After your death, your beneficiary(ies) receives the difference between the retirement benefits you received and your total contributions plus interest.
A death benefit is not guaranteed
Maybe
No
Option 3: Single Life Annuity
Monthly benefit for life.
After your death, no death benefit is payable to your beneficiary(ies).
No
No
Option 4: 100%, 75%, 50%, or 25% Joint and Survivor Annuity
Monthly benefit for life.
You choose whether your contingent annuitant receives 100%, 75%, 50% or 25% of your monthly retirement benefit after your death.
Your retirement benefit payment will not change if your contingent annuitant dies before you die.
Restrictions on percentages apply if your contingent annuitant is not your spouse and is more than 10 years younger than you.
You cannot change your contingent annuitant after IPERS has made your first monthly payment.
No
Yes, if your contingent annuitant outlives you.
Option 5: 120-Month Term Certain Annuity
Monthly benefit for life.
If you live to receive 120 retirement benefit payments, no death benefit is payable to your beneficiary(ies).
If you die before receiving 120 retirement benefit payments, your sole beneficiary receives the same monthly retirement benefit for the remainder of the 120 months, or multiple beneficiaries will receive a lump-sum death benefit.
Must be under age 90 to elect this option.
Maybe. If you name more than one person, a trust or an estate as your beneficiary, payments will be made in a commuted lump sum based on today's value of the remaining monthly payments.
Maybe. A monthly benefit can be paid only if you named one beneficiary and received less than 120 payments.
Option 6: 100%, 75%, 50%, or 25% Joint and Survivor Annuity With Pop-Up Annuity
Monthly benefit for life.
You choose whether your contingent annuitant receives 100%, 75%, 50% or 25% of your monthly retirement benefit after your death.
If your contingent annuitant dies before you, your benefit pops up to what it would have been under Option 2. You may designate a new beneficiary at that time.
Restrictions on percentages apply if your contingent annuitant is not your spouse and is more than 10 years younger than you.
You cannot change your contingent annuitant after IPERS has made the first monthly payment.
Maybe, if your contingent annuitant dies before you and any balance remains of your total contributions plus interest.
Yes, if your contingent annuitant outlives you.
Level Payment Options for Special Service Members
Special Service members may use the Level Payment Option for retirement Options 1 through 5. By choosing a Level Payment Option, a Special Service member may have a relatively level income before and after age 62 when combining IPERS with Social Security benefits.
If you select a Level Payment Option, you will receive higher IPERS benefits before age 62. When you reach age 62, your monthly retirement benefit will be permanently reduced by an amount determined by IPERSβ actuary. The higher benefit payable before age 62 and the permanent reduction after 62 are calculated to be actuarially equivalent to the benefit otherwise payable to you.
The payment amount is determined when you retire and is not recomputed based on your actual Social Security benefit. If you select a Level Payment Option, you are required to obtain an estimate from Social Security of the amount your Social Security benefit will be at age 62 and provide it to IPERS at least 60 days before your first IPERS payment.
