The Term-Certain Plans, Options 5 and 6
Plan Description
The Term-Certain plans allow you to take a small reduction in your lifetime monthly benefit in order to provide limited coverage to your beneficiary for a specific period of time after your retirement becomes effective. The beneficiary receives monthly benefits only if your death occurs within the term chosen.
If you die before you have received the minimum number of monthly payments guaranteed under the plan you choose (Option 5 is for 120 payments and Option 6 is for 60 payments), the remaining number of payments in the term are made to your beneficiary. If you live beyond the term of the plan you choose, your monthly payments will continue for your lifetime, but no payments will be made to your beneficiary when you die.
For example, if you choose Option 5, which provides beneficiary protection for 120 months after your retirement date, and you die after you receive 100 monthly payments, your beneficiary receives the remaining 20 monthly payments in the term. If, however, you live beyond the term (in this case longer than 120 months) your beneficiary would not receive any monthly payments after your death.
Any individual or legal entity can be named as your beneficiary under the Term-Certain plans, and you can change your designation at any time during the term. There is no “pop-up” provision at the end of the term selected.
Advantage:
These options normally provide larger retiree benefits than Options 2, 3 or 4, yet still offer some degree of beneficiary protection.
Disadvantage:
After the guaranteed payment period ends, the beneficiary protection stops. PSRS cost-of-living increases are calculated on the reduced benefit amount. It is important to remember that the terms for beneficiary coverage under the Term-Certain plans are measured starting from the date of your retirement, not the date of your death.
The plan you select cannot be changed after the effective date of your retirement.
