State Comptroller
Thomas P. DiNapoli
When preparing to retire, you need to decide which pension payment option to choose.
You may select one of the several options that pay you a smaller monthly benefit during your lifetime but provide for a possible payment to your designated beneficiary after your death.
Or, you may choose the Single Life Allowance, which pays you the maximum amount each month, with payments ending upon your death.
Q. What's the best option for me?
A. Since each member's financial situation is unique, I suggest you consult with a financial adviser before deciding which option best meets your needs. Some important things to consider when making your choice are:
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Is your beneficiary self-sufficient — is he or she employed or receiving his or her own pension? Will that income be adequate?
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Will your beneficiary have other income during retirement, such as Social Security benefits or savings? Again, will that income be adequate?
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Are you currently providing for a minor or disabled dependent? If so, how long do you anticipate providing for him or her?
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Do you have adequate life insurance coverage that will help provide for your beneficiary?
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Do you have any large outstanding financial obligations such as a mortgage, student loans or credit card debt? Will your beneficiary be able to meet these obligations upon your death?
Your answers to these and other questions your financial adviser may ask you to consider can help you determine which option will best meet your needs.
Q. Can I name more than one beneficiary to receive my pension after I die?
A. Yes, but you will only be able to select from a limited number of options. All members, regardless of tier, can name multiple beneficiaries under the Five-Year Certain or Ten-Year Certain Option.
The Cash Refund — Contributions (Option 1/2) is also available to Tier 1 and 2 members who wish to name multiple beneficiaries. In addition, Tier 1 members can name multiple beneficiaries under the Cash Refund—Initial Value (Option 1). If payable, pension benefits will be disbursed equally among all surviving named beneficiaries unless you indicated otherwise. If you select one of these options, you may change your beneficiary designations at any time.
Q. Can I change my option selection if my beneficiary dies before me?
A. No. You have up to 30 days after your pension benefit becomes payable to change your option selection. If you are a disability retiree, you may change your option selection up to 30 days after your disability application is approved, or up to 30 days after your retirement date, whichever is later.
Q. Where can I learn more about each option available to me?
A. Your retirement plan booklet describes each option available to you in detail. If you don't have a copy, most plan booklets are available on our Web site at www.osc.state.ny.us/retire/publications. You can also check with your employer or contact our Call Center toll-free at 866-805-0990 or 518-474-7736 in the Capital District area.