Name a beneficiary for the defined contribution component. At retirement, you may choose to have a monthly benefit continue to a survivor upon your death. For more information, see Benefit Payout Options. If you die while you are an active member, your beneficiary or your spouse, minor child or parent should contact your employer. The employer will assist in coordinating any benefits that may be due. A beneficiary can be one person, several people, a trust, or an organization selected to receive eligible plan assets in the event of your death.
Life situations such as marriage, the birth or adoption of a child, divorce or the death of a loved one can be cause for reviewing beneficiary designations. Pre-retirees should consider an important distinction between designating a sole beneficiary and multiple beneficiaries for their WRS Pension Plan.
See your pension plan handbook for more details on designating beneficiaries and survivor benefits. If you do not designate a beneficiary and you pass away pre-retirement, a lump sum payment will be made to your estate if you are a member of the Public Employee, Guard Firefighter, or Judicial Plans.
If you are not married, other provisions will apply, depending on the plan. When a member retires, the pension payout option selected by the member when beginning to draw a monthly retirement benefit will determine how the account is paid out upon death of the member. Another opening, rarely encountered, occurs for those who leave retirement, return to work with PERS benefits, and retire again. Only PERS 2 enrollees who pick someone other than their spouses for survivor benefits can switch to the no-survivor benefit option at any time after retirement.
The Department of Retirement Systems retires about 12, people a year, Miller said, and more than half of those retirees choose one of the survivor benefits. Traffic Alert. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Insurance Life Insurance. What Is a Death Benefit? Key Takeaways A death benefit is a payout to the beneficiary of a life insurance policy, annuity, or pension when the insured or annuitant dies.
Beneficiaries must submit to the insurer proof of death and proof of the deceased's coverage. Beneficiaries of life insurance policies receive the death benefit payment free of ordinary income tax, while annuity beneficiaries may pay income or capital gains tax on death benefits received.
While not subject to income tax, life insurance death benefits may be subject to estate tax. What are the tax implications of death benefits? What if you think you're a beneficiary of a death benefit?
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We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Related Terms Accelerative Endowment Definition An accelerative endowment is an option in a whole life insurance policy to withdraw the dividends that have accumulated in the account.
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