Retirement Payment Options

When you apply for retirement, you will choose a monthly payment option. Each option pays you for your lifetime. If you choose an option that provides a continued monthly payment to your beneficiary after you die, your monthly annuity will be reduced for your lifetime. These survivor options are based on your age and your beneficiary’s age at the time you retire.

If you select a survivor option and the beneficiary dies before you, your monthly payment will change to the standard annuity option for the rest of your life. You will not be able to name another beneficiary.

Self-funded Increase Option

Beginning Sept. 30, 2024, members in retirement Groups 1 – 3 (hired with a a state agency before Sept. 1, 2022), have the option to choose the Self-funded Increase Option. If you take the Self-funded Increase Option, it will initially reduce your annuity, but you will receive a 2% increase every year beginning the month following the first anniversary of the retirement date. The initial reduction is based on your actuarial factors, such as your age at retirement and your sex.

The Self-funded Increase Option is a way to help manage inflation after retirement. Members of Retirement Group 1, 2 or 3 should not expect cost-of-living adjustments or other retirement annuity increases, unless they take the Self-funded Increase Option.
The annual 2% increase will compound for the rest of your life, meaning that each annual 2% increase will be based on your annuity over the previous 12 months. The following example shows how the Self-funded Increase Option works with compounding. Please note that your annuity could be a different amount, resulting in different 2% increases over your retirement.

The Self-funded Increase Option is not available to:

• Group 2 members (hired Sept. 1, 2009 – Aug. 31, 2013) retiring before age 60, 
• Group 3 members (hired Sept. 1, 2013 – Aug. 31, 2022) retiring before age 62,
• members using Proportionate Retirement Program service to reach retirement eligibility,
• members retiring under ERS Disability Retirement, 
• elected state officials or
• Judicial Retirement System members.

The Self-funded Increase Option with other annuity options

You can choose one of the survivor payment options below in addition to the Self-funded Increase Option, but that will reduce your annuity even more. If you choose a survivor option and the Self-funded Increase Option, the 2% increase will continue as long as your beneficiary receives an annuity payment. 
If you are eligible for a Partial Lump-sum Option, you can chose the Self-funded Increase Option and a partial lump-sum payment, but that will reduce your annuity even more. 

Option Name	Retiree Payment	Survivor Payment
Standard Annuity	Highest monthly payment for life	No monthly payment continues to any survivor after your death. If there is money left in your account after your death, your survivor receives a one-time payment. You can designate one or more beneficiary to get any money left in your account.
Option 1 100% Survivor	Reduced monthly payment for life	After your death, your survivor gets 100% of your monthly payment for life. You can designate only one beneficiary. Note: If you choose someone other than your spouse as a beneficiary, their monthly survivor payment may be less than 100%, depending on the difference in your ages.
Option 2 50% Survivor	Reduced monthly payment for life	After your death, your survivor gets 50% of your monthly payment for life. You can designate only one beneficiary.
Option 3  Five-year	Reduced monthly payment for life	If you die before you get 60 monthly payments, your survivor gets the rest of the 60 monthly payments. Then the monthly payment stops. You can designate one or more beneficiary.  For example, if you die after 34 months of retirement, your beneficiary will get the payment for 26 months. You can designate one or more beneficiary. If you designate more than one beneficiary, you can decide the percentage of the monthly payments you’d like each beneficiary to get.
Option 4 10-year	Reduced monthly payment for life	If you die before you get 120 monthly payments, your survivor gets the rest of the 120 monthly payments. For example, if you die after 73 months of retirement, your beneficiary will get the payment for 47 months. Then the monthly payment stops. You can designate one or more beneficiary. If you designate more than one beneficiary, you can decide the percentage of the monthly payments you’d like each beneficiary to get.
Option 5 75% Survivor	Reduced monthly payment for life	After your death, your survivor gets 75% of your monthly payment for life. You can designate only one beneficiary. Note: If you choose someone other than your spouse as a beneficiary, their monthly survivor payment may be less than 75%, depending on the difference in your age.

Get estimates

Before you retire, you can log in to your ERS OnLine account to get an estimate of your monthly annuity under each option, with or without the Self-funded Increase Option and/or the Partial Lump-sum Option, if you’re eligible. When you meet with an ERS retirement counselor just before retirement, they can provide amounts under each option.