Retirement Plans A & B - Safety Member

SECTION 4 | Exploring the Benefits

Before we explore the benefits included under Plans A and B, 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 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: Your Personal Retirement Network

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.

• Displays your Retirement Plan data, LACERA interactions, and Annual Benefit Statement
• Shows active members their first eligible date for retirement and allows them to create Retirement Benefit Estimates based on their actual data on file with LACERA
• Retired members can view their Direct Deposit and allowance histories, Form 1099-Rs, and submit tax withholding elections

My LACERA is still under development and expanding regularly. Other interactive features on the way will provide active members with the 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.

 

The Retirement Options are designed to offer flexibility and address the needs of various lifestyles and family situations.

SAFETY PLANS A AND B: SERVICE RETIREMENT OPTIONS
	Overview	Eligible Beneficiary	Survivor Benefit*	Change Beneficiary After Retirement
Unmodified	Highest monthly retirement allowance available	Eligible spouse, domestic partner, or minor child*	65% of member's allowance	If your eligible beneficiary dies before you, you may name a new beneficiary who will receive any remaining portion of your accumulated contributions. The new beneficiary is not eligible for a continuing allowance.
Unmodified +Plus	Allows member to provide survivor a customized percentage of member's reduced allowance	Eligible spouse, domestic partner, or minor child*	Custom percentage between 66% and 100% of member's reduced allowance (reduced by only enough to cover the difference between 66% and 100%)	No
Option 1	Member receives slightly reduced Unmodified allowance during his/her lifetime; named beneficiary receives remaining balance of member’s accumulated contributions	Any named beneficiary	Lump-sum payment (remaining balance of member's accumulated contributions)	Full flexibility to change beneficiary at any time
Option 2	Member receives reduced Unmodified allowance during his/her lifetime; named beneficiary receives 100% of reduced allowance	Any named beneficiary with an insurable interest	100% of member's reduced allowance (reduction covers the entire cost of survivor's continuing allowance, based on age of member and beneficiary)	No
Option 3	Member receives reduced Unmodified allowance during his/her lifetime; named beneficiary receives 50% of reduced allowance	Any named beneficiary with an insurable interest	50% of member's reduced allowance (reduction covers the entire cost of survivor's continuing allowance, based on age of member and beneficiary)	No
Option 4	Member receives reduced Unmodified allowance during his/her lifetime; can be customized to provide for multiple beneficiaries	Any named beneficiary(ies) with an insurable interest	Member can provide a fixed percentage or a set dollar amount to one or more beneficiaries (allowance reduction covers entire cost of survivors’ continuing allowance, based on age of member and beneficiaries)	No

*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 A and B 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 change your beneficiary after retirement.* However, upon your death, your new beneficiary would only receive a $5,000 lump-sum death/burial benefit, along with any remaining portion of your accumulated contributions. (You may name a different beneficiary to receive the $5,000 lump-sum death/burial benefit. See Death/Burial Benefit section for details.)

Unmodified+Plus:

Under this customizable Option, you can designate the percentage of your monthly allowance—between 66 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 66 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 1:

This is a lump-sum benefit under which you receive a slightly reduced Unmodified Retirement Allowance during your lifetime. If you die before receiving the contributions you paid into the fund, the balance of your accumulated contributions is paid in a lump sum to your named beneficiary or estate. Only Option 1 allows full flexibility to change your beneficiary designation after you retire.

If your beneficiary dies before you, the reduction to your retirement allowance remains in effect. However, you may name another beneficiary to receive the Option 1 lump-sum payment.

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 A and B 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 or domestic partner, you must designate that person 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. Only Option 1 allows you full flexibility to change your beneficiary designation after you retire. Changing a primary beneficiary post-retirement under Unmodified+Plus or Option 2, 3, or 4 is not permitted. The terms of the Unmodified Option allow you to name a new beneficiary only if your eligible spouse, domestic partner, or minor child dies before you. In such a case, the new beneficiary is not eligible for a continuing allowance; he or she will receive any remaining portion of your accumulated contributions. For additional information, visit lacera.com or call 1-800-786-6464 to speak with a LACERA Retirement Benefits Specialist.

 

 

6/14/09