Benefit Payment Options

At the time you retire, you will make an irrevocable selection of a benefit payment option. The various options determine the form and extent of benefits distributed during your retirement and upon your death. Because your option choice is irrevocable, it is important to consider your selection carefully. These descriptions summarize the options established in the County Employees Law of 1937 (CERL). These options are reviewed in the Planning to Retire class.

Unmodified Allowance

The unmodified allowance is the highest allowance possible. This option provides, upon your death, that your qualified surviving spouse/domestic partner will receive a lifetime benefit equal to 60% of the benefit you received during retirement. To qualify, you and your spouse/domestic partner must be legally married/registered as domestic partners with the State of California, for at least one year prior to your retirement date and continuously until the member's death. If there is no qualified spouse/domestic partner and there are minor children, there is a 60% continuance available to the minor children as long as they remain eligible. Eligible minor children are under age 18, or under age 22 if in school full time and unmarried. If, at the time of your death, there is no one eligible for a continuance, a lump-sum payment of remaining contributions, if any, becomes payable to your beneficiary(ies).

Option 1

This option does not provide a continuance. Upon your death, a lump sum payment of any remaining member contributions becomes payable to your beneficiary. Each month a portion of your benefit is deducted from your contributions until the balance of your contributions is zero.

You will continue to receive your benefit, but there would no longer be a benefit payable to your beneficiary. You may change your beneficiary at any time.

Option 2

This option provides, upon your death, a lifetime benefit to your sole beneficiary equal to 100% of the benefit you received during retirement. In order to provide this continuance, your benefit is reduced during retirement based on your life expectancy and the life expectancy of your beneficiary. Should your beneficiary pre-decease you, you will continue to receive the same reduced amount. The Internal Revenue Code (IRC) limits the percent of continuance that can be paid to a non-spouse beneficiary. The percent allowed depends on your age at retirement, and the adjusted age difference between you and your beneficiary. The difference between the IRC limit and 100% is converted to a present value lump sum at the time of your death and paid in a lump sum to your sole beneficiary. You will not be allowed to designate a new beneficiary.

Option 3

This option provides, upon your death, a lifetime benefit to your sole beneficiary equal to 50% of the benefit you received during retirement. In order to provide this continuance, your benefit is reduced during retirement based on your life expectancy and the life expectancy of your beneficiary. Should your beneficiary pre-decease you, you will continue to receive the same reduced amount. You will not be allowed to designate a new beneficiary.

Option 4

This option allows you to name multiple beneficiaries, or to designate a specific percentage of lifetime continuance to be paid to your beneficiary(ies) after your death. In order to provide this continuance, your benefit is reduced during retirement based on your life expectancy and the life expectancy of your beneficiary(ies). Should your beneficiary pre-decease you, you will continue to receive the same reduced amount. Because of the unique nature of this option, costs associated with calculating the benefit will be borne by the member. 

Benefit Payment Option Information

Click link to download information about choosing your benefit payment option