SECTION 5 Exploring the Benefits
Before we explore the benefits included under Plan E, it's important to emphasize the value of long-term planning in maximizing one's retirement benefit. LACERA offers free workshops that provide valuable knowledge you can use to enhance your retirement and position yourself and your family to gain the greatest available advantage. If you are three to five years from retirement, we strongly recommend you attend a Pre-Retirement Workshop. Call LACERA at 1-800-786-6464 to register.
My LACERA
Visit My LACERA to connect with your personal retirement network. This secure members-only section of lacera.com tracks and stores all your retirement account data including entry age, Plan information, service credit earned, highest one-year and three-year compensation, beneficiary designation, etc. My LACERA offers a menu of interactive features that enables you to complete a variety of service transactions on your own.
Interactive features on My LACERA include:
- Create your own Retirement Benefit Estimate online
- Automatically displays your personal data on file with LACERA
- Uses online “wizard” to guide you step-by-step through the variables involved to generate an accurate, personalized calculation of the benefits you'll receive at retirement
- Shows the first date you are eligible to retire and how specific retirement dates and additional service credit can increase your retirement allowance
- Displays available Retirement Options and tips
- Allows you to enter different data and create estimates based on different scenarios
My LACERA is still under development and expanding regularly. Other interactive features on the way will provide active members with the online ability to change their beneficiary designation and compute the effect of a potential ARC purchase on the monthly allowance they'll receive at retirement. Check My LACERA often to take advantage of new features as they become available.
Retirement Options
At the time of retirement, Plan E allows you to choose from five Retirement Options. The Option you elect affects the amount of your retirement allowance and the amount of the survivor benefit payable to your eligible spouse, domestic partner, or named beneficiary upon your death.
The Retirement Options are designed to offer flexibility and address the needs of various lifestyles and family situations.
*Survivor benefits terminate upon the death of the eligible surviving spouse, domestic partner, or named beneficiary. Surviving minor child(ren) are eligible for survivor allowances only when there is no surviving spouse or domestic partner. Survivor allowances to an eligible minor child continue until the child is no longer eligible.
More about Plan E Retirement Options
Survivors and beneficiaries must meet certain eligibility requirements.
Unmodified Option:
This Option pays you the full amount of the monthly benefit to which you are entitled based on your age at retirement, amount of service credit, and final compensation. Under this option, if your eligible surviving spouse or domestic partner or minor child dies before you, you may not change your beneficiary after retirement.* However, you may name a new beneficiary to receive the $5,000 lump-sum death/burial benefit.
Unmodified+Plus:
Under this customizable Option, you can designate the percentage of your monthly allowance—between 56 and 100 percent—that your eligible surviving spouse, domestic partner, or minor child(ren) will receive upon your death.* To fund your survivor's allowance, your monthly allowance is reduced during your lifetime. The reduction is calculated using an actuarial equivalent to cover the cost difference between 56 and 100 percent.
Restrictions of this Option limit the payment of a continuing allowance to an eligible spouse, domestic partner, or minor child(ren). You cannot change your beneficiary after retirement. If your beneficiary dies before you, the reduction to your retirement allowance remains in effect.
*Minor child eligibility applies only in situations where there is no surviving spouse or domestic partner; additional restrictions apply.
Option 2:
If you elect Option 2, you will receive a reduced Unmodified Retirement Allowance during your lifetime. The reduction will be calculated based on your age at retirement and the age of your beneficiary. Upon your death, your named beneficiary will receive 100 percent of your reduced allowance.
If your beneficiary dies before you, the reduction to your retirement allowance remains in effect. You cannot name another beneficiary to receive the previous beneficiary's portion of your monthly allowance.
Option 3:
This Option pays you a reduced Unmodified Retirement Allowance during your lifetime; upon your death your named beneficiary receives 50 percent of your reduced allowance as a monthly continuance. Both your age at retirement and the age of your beneficiary are used to calculate the amount of your reduced allowance.
If your beneficiary dies before you, the reduction to your retirement allowance remains in effect. You cannot name another beneficiary to receive the previous beneficiary's portion of your monthly allowance.
Option 4:
Perhaps the most flexible of the Retirement Options, Option 4 allows you to name one or more beneficiaries to receive a fixed percentage of the reduced Unmodified Retirement Allowance you receive during your lifetime. If you prefer, you may designate a set dollar amount, rather than a fixed percentage, as a monthly continuance for one or more of your beneficiaries. The reduction to your allowance is calculated using your age at retirement and the age of your beneficiaries.
If one of your beneficiaries dies before you, the reduction to your retirement allowance remains in effect. You cannot name another beneficiary to receive the previous beneficiary's portion of your monthly allowance.
Designating Beneficiaries
Eligible beneficiaries referenced in Plan E Retirement Options are defined as follows:
Eligible Spouse:
- Must be married one year prior to the member's retirement and submit an original certified marriage certificate
Eligible Domestic Partner:
- Must be registered with the California Secretary of State, with a Certificate of Registered Domestic Partnership, one year prior to the member's retirement
Eligible Child(ren):
- Up to age 18
- Unmarried
- Eligibility may be extended through the age of 21 if the eligible child(ren) remains unmarried and a full-time student in an accredited educational institution
- Surviving minor child(ren) are eligible for survivor allowances only when there is no surviving spouse or domestic partner
Person with Insurable Interest:
According to California law, every person has an insurable interest in the life and health of:
- Himself [herself]
- Any person on whom he [or she] depends wholly or in part for education or support
- Any person under a legal obligation to him [her] for:
- payment of money
- property or services of which death or illness might delay or prevent the performance
- Any person upon whose life any estate or interest vested in him [her] depends
Primary Beneficiary. A member's primary beneficiary is the first beneficiary entitled to receive a death benefit subsequent to the member's death. A primary beneficiary may receive 100 percent of the member's death benefit—or a lesser percentage if there is more than one person named as a primary beneficiary.
Beneficiary Priority. Under the Unmodified Option, the law entitles your eligible spouse or domestic partner, whether named as a beneficiary or not, to a continuing monthly allowance upon your death. If there is no spouse or domestic partner, the eligible minor children will receive the continuing allowance until their eligibility expires.
Dividing Benefits among Beneficiaries. When dividing benefits among your beneficiaries, the percentage of benefits must total 100 percent. Use whole numbers when assigning portions. For example, percentages for three children would be designated as 34, 33, and 33 percent.
If you have a Trust and wish to leave a continuing monthly benefit to your spouse, you must designate the spouse as your Primary Beneficiary-100 percent, and the Trust as Secondary Beneficiary-100 percent. If your spouse or domestic partner dies before you and you have no eligible minor children, the Trust will receive a $5,000 lump-sum death/burial benefit. A trust cannot receive a continuing monthly allowance.
Beneficiary Changes after Retirement. All Plan E Retirement Options prohibit the changing of your primary beneficiary after you retire.
Death/Burial Benefit
A $5,000 one-time, lump-sum death/burial benefit, is payable upon the death of a retired member.* The beneficiary designation for this benefit is separate from the beneficiary designation for other LACERA survivor benefits. You may name any individual, trust, or organization to receive the $5,000 lump-sum death/burial benefit. In addition, you may change the beneficiary designation for this benefit at any time, before or after retirement.
If you do not designate a beneficiary specifically for this benefit, the $5,000 will be paid to your named primary beneficiary(ies).
*This benefit is taxable; a beneficiary under age 70.5 may defer taxes by rolling it over to a tax-qualified plan.
6/16/09