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The information contained in this publicationis subject to change based on the actions ofthe Pennsylvania State Legislature.This pamphlet is designed solely to providean overview of benefits available to membersof the Public School Employees’ RetirementSystem (PSERS) and is not intended to be asubstitute for retirement counseling.
Table of ContentsWhat is a Death Benefit?. 1Death Benefits DuringEmployment. 1-8Value of Death Benefit. 1Beneficiary Information. 3After Member's Death. 5Payment of DB Death Benefit. 5Payment of DC Death Benefit. 8Health Insurance. 8Death Benefits AfterRetirement. 9-15Value of Death Benefit. 9Beneficiary Information.11Death After Submitting a RetirementApplication. 12After Member's Death. 13Payment of DB Death Benefits. 14Payment of DC Death Benefits. 14Health Insurance. 15Death Benefits while ReceivingPSERS Disability Benefits. 15Taxes, Terminated Members, andContacting PSERS. 16-17Taxes on Your Death Benefit. 16Terminated Vested Members. 16Terminated Non-Vested Members. 17Contacting PSERS. 17Glossary. 18
What is a Death Benefit?A death benefit is the amount payableto beneficiary(ies) in the event of themember’s death. A death benefit is notguaranteed.Death Benefits DuringEmploymentValue of Death BenefitThe estimated value of your death benefitis noted on your Statement of Account.Before a death benefit is issued, PSERSdeducts from your account any remainingdebts.If you are a Class T-C, Class T-D, ClassT-E, or Class T-F member and you havenot vested, your death benefit equals yourtotal contributions and interest. For moreinformation on vesting, refer to the ActiveMember Handbook on our website.If you are a Class T-G or Class T-H memberand you have not vested in your PSERSDefined Benefit (DB) Plan, your deathbenefit equals your total contributionsand interest to the DB Plan plus thevested amount in your PSERS DefinedContribution (DC) account.If you are a Class DC member, your deathbenefit is the vested amount in your DCaccount.PSERS Third Party Administrator (TPA)Voya Financial will contact your DCbeneficiary(ies) if there is an amount payablein your DC account.Death Benefits During Employment1
If you are vested, your death benefit iscalculated as follows:Multiplier based on Membership ClassX Final Average SalaryX Credited ServiceX Early Retirement Factor (if applicable)X Dollar Annuity Value (based on age at death) Vested amount in Defined ContributionAccount (if applicable) Death Benefit ValueMembership Class MultipliersMembership ClassMultiplierClass T-C2.00%Class T-D*2.50%Class T-E2.00%Class T-F2.50%Class T-G1.25%Class T-H1.00%Class DCN/A* Class T-D multiplier is 2.5% for school service and2.0% for any non- school service. Non-school serviceconsists of non-intervening military, government, out-ofstate, county commissioner, county nurse, maternity, andcadet nurse corps.2Let’s Talk about PSERS Death Benefits
Beneficiary InformationHow and when do I name mybeneficiary(ies)?All members should name a beneficiary(ies)as soon as possible. A beneficiary isthe person(s) or entity(ies) you wish toreceive any available benefits upon yourdeath. You may name one or more primarybeneficiaries and one or more secondarybeneficiaries. If an individual, who is aprimary beneficiary, predeceases you, thentheir share (percentage) will be distributedproportionally among any remaining primarybeneficiaries. For a secondary beneficiaryto receive a benefit, all named primarybeneficiaries must be deceased.You may name or change your beneficiarynomination electronically through theMember Self-Service (MSS) Portal.You may also submit a Nomination ofBeneficiaries (PSRS-187) form to PSERS.Please note that your most recentlysubmitted nomination of beneficiaries willsupersede previous nominations.If you are a Class T-G or Class T-Hmember, your nomination will apply to boththe defined benefit and defined contributioncomponents of your retirement unless youidentify separate beneficiaries throughthe MSS Portal or on the Nominationof Beneficiaries: Addendum for DefinedContribution (DC) Only (PSRS-187a).Keeping your beneficiary designationcomplete and up to date will ensurethat benefits are paid promptly andin accordance with your wishes. If abeneficiary has not been named or yourprimary and secondary beneficiary(ies)predecease you, your benefits will be paidto your estate.Your PSERS retirement benefits do notinclude any special spousal rights or requirea spousal consent/waiver.Death Benefits During Employment3
How do I name a minor as a beneficiary?If your beneficiary(ies) is under 18 yearsof age, a guardian should be designatedon the Nomination of Beneficiaries formfor each minor named. A guardian is theperson designated to handle financial affairsassociated with PSERS benefits.Can I change my choice of beneficiary?You may update your beneficiaryinformation through the MSS Portal or bysubmitting a properly-completed Nominationof Beneficiaries form. The receipt of anynew document naming beneficiaries,including retirement applications, willsupersede all previously filed designations.At a minimum, you should review yourbeneficiary information if: You marry or divorce. One of your beneficiaries changeshis or her name or address. One of your beneficiaries reachesage 18. You have a child or adopt a child. One of your beneficiaries dies.4Let’s Talk about PSERS Death Benefits
After Member's DeathWhat does my beneficiary or estaterepresentative need to do in the event ofmy death?In the event of your death, yourbeneficiary(ies) or estate representative willneed to:1. Contact your current Pennsylvaniapublic school employer.2. Send PSERS a copy of the deathcertificate. The death certificate mustbe sent to:PSERS5 N 5th StreetHarrisburg PA 17101-1905717.772.3860Does my DB account accrue interestafter my death?No. Interest ceases to accrue upon yourdeath.Does the value of my DC account changeafter my death?Yes. The value of your DC account willcontinue to fluctuate with the market until itis withdrawn.Payment of DB Death BenefitWhat payment options are available tomy beneficiary(ies)?Death Benefits for Non-Vested MembersA refund of your contributions andinterest will be paid in a lump sum to yourdesignated beneficiary(ies). The paymentcan be made as a lump sum directly tothe beneficiary(ies) minus 20% federalwithholding tax, rolled over to a qualifiedretirement plan, or a combination of the twooptions.Death Benefits During Employment5
Death Benefits for Vested MembersIf you are vested, your designatedbeneficiary(ies) will be eligible for thepresent value (see glossary) of yourretirement account.Death Benefit Payment OptionsIf the death benefit is less than 10,000,payment will be made in a lump sum. Thepayment can be made as a lump sumdirectly to the beneficiary(ies) minus 20%federal withholding tax, rolled over to aqualified retirement plan, or a combinationof the two options.If the death benefit is 10,000 or greater,there are three different payment plansavailable to your beneficiary(ies):Plan 1 – Lump-Sum Payment Only: Ifyour beneficiary(ies) elect this plan, they willreceive the amount of the death benefit in alump-sum payment. There are no monthlybenefits.Plan 2 – Monthly Benefit Payment Only:Your beneficiary(ies) have three optionsunder this Plan.Option A – Your beneficiary(ies) willreceive the highest monthly benefitfor life. Payments cease upon yourbeneficiary’s death.Option B – Your beneficiary(ies) isguaranteed to receive a reduced monthlypayment for 60 months. The monthlypayments will continue throughout thebeneficiary’s lifetime regardless of thenumber of payments received. If yourbeneficiary(ies) dies before receiving the60 payments, then the person namedas their beneficiary will receive theremainder of the 60 payments in onelump- sum. If your beneficiary(ies) diesafter receiving the 60 payments, then nofurther payments are made.6Let’s Talk about PSERS Death Benefits
Option C – Your beneficiary(ies) isguaranteed to receive a reduced monthlypayment for 120 months. The monthlypayments will continue throughout thebeneficiary’s lifetime regardless of thenumber of payments received. If yourbeneficiary(ies) dies before receiving the120 payments, then the person namedas their beneficiary will receive theremainder of the 120 payments in onelump sum. If your beneficiary(ies) diesafter receiving the 120 payments, thenno further payments are made.Plan 3 – Partial Lump-Sum Payment Monthly Benefit Payment: Yourbeneficiary(ies) are permitted to receivea partial lump-sum payment and monthlypayment Option A, B, or C under Plan 2.A minimum of 10,000 must remain in the account to beeligible to elect a monthly payment Option under Plan 2.Your beneficiary(ies) may be subject tofederal income tax. PSERS will sendinformation to your beneficiary(ies)explaining tax responsibilities and thepayment options.How long will it take PSERS to pay mydeath benefit to my beneficiary(ies)?After receiving a copy of the deathcertificate, PSERS will contact your mostrecent employer to request final salary andservice information.Upon receipt of this information, PSERSwill provide the beneficiary(ies) on recordwith the estimated death benefit andother important documents needed topay your death benefit. At this point, yourbeneficiary(ies) must elect a payment planand complete the necessary documents.Once PSERS receives the properlycompleted forms from the beneficiary(ies)and final information from the employer,payment will be made within 60 days.Death Benefits During Employment7
Payment of DC Death BenefitsPSERS will notify Voya after receivinga death certificate for a participant inPSERS DC Plan. If a DC death benefit ispayable from your DC account, Voya willcontact your beneficiary(ies) with additionalinformation.If the vested balance of the accountis greater than 5,000, the DCbeneficiary(ies) may take a lump sumdistribution, roll over the balance toanother qualified plan or IRA, or maintainan account with the DC Plan. If yourDC beneficiary(ies) chooses to maintainan account with the DC Plan, yourDC beneficiary(ies) must nominate abeneficiary or payment will be made to yourbeneficiary’s estate.If the vested balance of the accountis equal to or less than 5,000, theDC beneficiary(ies) may take a lumpsum distribution or roll over the balanceto another qualified plan or IRA. If thebeneficiary(ies) do not elect a distributionmethod within the provided time frame, thedeath benefit will automatically be rolledover to a Voya IRA in the beneficiary’sname.Health InsuranceAre my beneficiary(ies) entitled to agroup health insurance plan throughPSERS?Your beneficiary(ies) is not eligible for thePSERS-sponsored Health Options Program(HOP) services after your death unlessyour beneficiary elects a monthly benefitpayment option.Visit hopbenefits.com for more information.8Are my beneficiary(ies) entitled toreceive premium assistance?No. Premium assistance is not available tobeneficiaries.Let’s Talk about PSERS Death Benefits
Death Benefits AfterRetirementValue of Death BenefitWhat is the value of my DB deathbenefit? The value of your death benefitis determined by the option you selectedat retirement. Before a death benefitis issued, PSERS deducts any debtsremaining from your account.When you retired, your options were asfollows:Maximum Single Life Annuity(MSLA) – The maximum single lifeannuity provides the highest benefitamount for your lifetime. If at the timeof your death you have not received anamount equal to your contributions andinterest, the balance will be paid to yourbeneficiary(ies).Option 1 – Your monthly benefit isreduced to provide for a death benefit. Ifat the time of your death you have notreceived monthly benefits in an amountequal to your account’s present valueestablished at the time of retirement,then the balance is paid to yourbeneficiary(ies).Option 2 – Your monthly benefit isreduced based on your age and the ageof your survivor annuitant at retirement.At the time of your death, the samemonthly benefit is paid to your survivorannuitant throughout his or her lifetime.*Option 3 – Your monthly benefit isreduced based on your age and the ageof your survivor annuitant at retirement.At the time of your death, one-half ofyour monthly benefit is paid to yoursurvivor annuitant throughout his or herlifetime.*Death Benefits After Retirement9
Customized Option – Your monthlybenefit and the value of your deathbenefit are based on a plan of yourown actuarially equivalent design otherthan those listed above. PSERS mustapprove this plan.Remember, if you withdraw yourcontributions and interest and elect MSLA,there will be no balance due to yourbeneficiary(ies).*If your retirement date was prior to July1, 2013, your age and gender and theage and gender of your survivor annuitantwere used when calculating a benefit.Is my beneficiary or survivor annuitanteligible to receive COLA’s?If you are a member who has received aCOLA and you elected a retirement optionproviding for a survivor annuitant (excludingthe Customized Option designed for aspecific amount), your survivor annuitant willreceive the appropriate percentage increaseof your monthly benefit awarded by theCOLA. Historically, COLA's enacted afterthe death of the member are not payable tothe survivor annuitant.What is the value of my DC death benefit,if any?If you are a Class T-G, Class T-H, or ClassDC member, you have a DC componentto your retirement. As a participant in theDC Plan, the death benefit is the vestedamount in your account, if any. Voya,the administrator of PSERS DC Plan, willcontact your DC beneficiary(ies) if there isan amount payable.10Let’s Talk about PSERS Death Benefits
Beneficiary InformationHow do I name and change mybeneficiary(ies) or survivor annuitant?Your beneficiary(ies) or survivor annuitantis the person(s) you wish to receive yourretirement benefits upon your death.The rules for naming or changing abeneficiary(ies) or a survivor annuitant isdependent on the retirement option youselected during the retirement process.Below are the rules based upon youroriginal retirement option selection:MSLA and Option 1 – You may name oneor more primary beneficiaries and one ormore secondary beneficiaries. You maychange your beneficiary at any time.Option 2 and Option 3 – You may nameonly one survivor annuitant. If yourdesignated survivor annuitant dies beforeyou, or if you divorce or marry after electingone of these options, you may name a newsurvivor annuitant or beneficiary(ies) and/or elect a different option. Your monthlybenefit will be recalculated based on thecurrent value of your account, your newsurvivor annuitant’s age and your age atthe time of the change. It is likely that yourmonthly benefit will be reduced in sucha recalculation. Contact PSERS for anestimate before making your change.Customized Option – Changing yourbeneficiary(ies) or survivor annuitant underthe Customized Option is determined by theterms you defined in the option. ContactPSERS for more information.Death Benefits After Retirement11
Death After Submitting aRetirement ApplicationIf you die after submitting a retirementapplication for your DB benefit but priorto your Benefit Effective Date, PSERSwill pay your death benefits according tothe beneficiary(ies) or survivor annuitantnamed in the submitted retirementapplication. If there is no validly namedbeneficiary(ies) or survivor annuitant onthe submitted retirement application oryour beneficiary(ies) or survivor annuitantpredeceases you, your death benefit willbe paid to your last named beneficiarieson file with PSERS or to your estate ifnone are named. If you have both a DBand DC component (Class T-G and ClassT-H members) to your retirement, thebeneficiaries or survivor annuitants namedin your retirement application will also beused for the distribution of your DC account.Unlike some retirement programs, yourPSERS pension does not include anyspecial spousal rights or require a spousalconsent/waiver. PSERS is legally requiredto honor the last properly-submittedbeneficiary nomination in our possession.If you do not keep your beneficiarynominations current, we may be forced topay your death benefits to someone whomyou would no longer select.12Let’s Talk about PSERS Death Benefits
After Member's DeathWhat does my beneficiary(ies) or estaterepresentative need to do in the event ofmy death?In the event of your death, yourbeneficiary(ies) or estate representative willneed to:1. Notify PSERS by calling PSERS’ tollfree phone number at 1.888.773.7748or emailing to ContactPSERS@pa.gov.PSERS will need: The member’s full name andPSERS ID or last four digits of thesocial security number. The date of death. A contact person in the event moreinformation or documentation isneeded. The caller should have availablethe contact’s name, address, andtelephone number.2. Send PSERS a copy of the deathcertificate. The death certificate mustbe faxed or mailed to:PSERS5 N 5th StreetHarrisburg PA 17101-1905717.772.3860Death Benefits After Retirement13
Payment of DB Death BenefitIf a death benefit is payable, how longwill it take PSERS to pay my deathbenefit?After PSERS receives a copy of the deathcertificate, we will write to the survivorannuitant, beneficiary(ies), or PSERScontact person to assist PSERS in securingall documents needed to process yourbenefit.Upon receipt of all documents needed toprocess your benefit, PSERS will pay yourdeath benefit within 60 days in accordanceto the payment option you selected atretirement. (See “Value of Death Benefit” onpage 9.)Payment of DC Death BenefitPSERS will notify Voya after receivinga death certificate for a participant inPSERS DC Plan. If a DC death benefit ispayable from your DC account, Voya willcontact your beneficiary(ies) with additionalinformation.Refer to “Payment of DC Death Benefit” inthe “Death Benefits During Employment”section.14Let’s Talk about PSERS Death Benefits
Health InsuranceAre my beneficiary(ies) entitled to agroup health insurance plan?Spouses and/ or dependent children of adeceased retired PSERS member may becovered by the Health Options Program(HOP) under certain circumstances.Comprehensive descriptive material isavailable on hopbenefits.com, or by callingthe HOP Administration Unit toll-free at1.800.773.7725.Are my beneficiary(ies) entitled toreceive premium assistance?No. Premium assistance is not available tosurviving spouses or dependents of PSERSretirees.Death Benefits while ReceivingPSERS Disability BenefitsThe value of your death benefit isdetermined by the option you select atretirement. If you are a vested memberreceiving a PSERS disability benefit,the retirement options available to youare MSLA or a survivor annuitant option(Options 2, 3, or Customized Option). Ifyou are a Class T-E, Class T-F, ClassT-G, or Class T-H member who has notyet vested with PSERS, you may onlyselect the MSLA option. PSERS will payyour death benefit in accordance with thepayment option you selected at retirement.For more information regarding disabilityretirement options and death benefits whenon disability, refer to the PSERS publicationLet’s Talk About Disability Benefits(Publication #9540) available on the PSERSwebsite.Death Benefits After Retirement15
Taxes, TerminatedMembers, andContacting PSERSTaxesWhat taxes will my beneficiary(ies) beresponsible for after receiving my deathbenefit?The death benefit paid to yourbeneficiary(ies) is subject to federal incometax. While we do provide tax information onour website in the Let’s Talk About Taxes(Publication #9600) pamphlet, we are nottax experts. We strongly recommend youseek professional tax advice.How will my beneficiary(ies) report to theInternal Revenue Service (IRS) the deathbenefit received from PSERS?By the end of each January, PSERSmails an IRS Form 1099-R to its retirees,beneficiaries, and survivor annuitants. Thisdocument is used to report any moniespaid by PSERS. The 1099-R will provideyour beneficiary(ies), survivor annuitant,next-of-kin, or estate representative with theinformation needed to complete the U.S.Individual Income Tax Return (Form 1040).Any questions or concerns about taxesshould be discussed with a tax consultant orthe IRS.Terminated Vested MembersTerminated vested members are nolonger employed by a Pennsylvania publicschool employer and have chosen todefer receiving their retirement benefit.Please refer to the “Death BenefitsDuring Employment” section for rules andinstructions.16Let’s Talk about PSERS Death Benefits
Terminated Non-VestedMembersTerminated non-vested members areno longer employed by a Pennsylvaniapublic school employer and only qualifyfor a refund of contributions and interest.Please refer to the “Death BenefitsDuring Employment” section for rules andinstructionsContacting PSERSYou may contact PSERS toll-free at1.888.773.7748 from 8:00 a.m. to5:00 p.m., Monday through Friday, excepton State holidays. PSERS also hasregional offices located throughout thestate. You may reach your local regionaloffice from 8:30 a.m. to 5:00 p.m. Acomplete list of all PSERS regional officesand contact numbers is found on PSERSwebsite under Regional Offices.PSERS5 N 5th StreetHarrisburg PA 17101-1905Toll-free: 1.888.773.7748Local Telephone: 717.787.8540Email address: ContactPSERS@pa.govWebsite: psers.pa.govTaxes, Terminated Members, and Contacting PSERS17
GlossaryActive Member – A public school employee who hasmet the eligibility requirements for membership andfor whom pickup contributions are being made toPSERS, or is on leave without pay.Beneficiary – The person or persons last designatedin writing to PSERS by a member to receive his or heraccumulated deductions or a lump sum benefit uponthe death of such member.Benefit Effective Date – The date your PSERSmonthly benefit begins.Death Benefit – The benefit awarded to beneficiariesor survivor annuitant in the event of a member’sdeath.Defined Benefit (DB) Plan – In the DB Plan, theretirement benefit is based on a formula. The formulaused by PSERS includes a pension multiplier, yourcredited years of service, and your final averagesalary. Class T-C, Class T-D, Class T-E, and ClassT-F are defined benefit only plans. Class T-Gand Class T-H have a retirement benefit basedon a formula and a separate benefit based on DCcontributions and investment earnings, if any.Defined Contribution (DC) Plan – In the DCPlan, the retirement benefit is based off on theamount of contributions in your account and theinvestment options you choose and their investmentperformance. Your DC contributions and earnings,if any, are available for you to withdraw when youterminate your employment or retire. Class DC is adefined contribution only plan. Class T-G and ClassT-H have a retirement benefit based on a formula anda separate benefit based on DC contributions andinvestment earnings, if any.Dollar Annuity Value – A factor provided by thePSERS actuary used to calculate the value of a seriesof future periodic benefit payments to a member,based partly on the age of the member. It is alsobased on the concept of time value of money and theidea that an amount received today is worth morethan the same amount received at a future date.18Let’s Talk about PSERS Death Benefits
Health Options Program (HOP) – The PSERSsponsored group health insurance available to eligibleretirees and their dependents.Premium Assistance – A tax-free benefit providedby PSERS to help eligible retirees pay for healthcoverage through HOP or a Commonwealth publicschool employer or district health plan.Present Value –The total value of a member’sretirement account used to fund monthly benefitpayments over the member’s lifetime, or the amountpaid to a beneficiary when a vested member diesin service. This is determined by multiplying themaximum single life annuity by the dollar annuityfactor at the time of retirement.Survivor Annuitant – The person designated by aretired member of PSERS who chooses a retirementOption 2, Option 3, or Customized Option thatspecifies a survivor annuitant to receive a lifetimebenefit after the member’s death. Only one survivorannuitant may be named in Option 2 and Option3. Survivor annuitants may only be changed if thesurvivor annuitant predeceases the member or if themember’s marital status changes.Vested Amount (DC Plan) – The vested amountin the DC Plan is the amount you are eligible toreceive after terminating employment. You willalways be 100% vested in, and eligible to receive,the balance in your PSERS DC Plan account thatis attributable to your DC participant contributions,your after-tax voluntary contributions, and yourrollover contributions. You must be vested to beeligible to receive your employer’s DC contributionsin your PSERS DC Plan account and the earningson those contributions, if any, after termination ofemployment, you must be vested. You must earnthree eligibility points to be vested for your employer’sDC contributions and earnings. A participant earnsone eligibility point for each fiscal year in which theparticipant contributes to the PSERS DC Plan.Vesting Requirements – The length of servicerequired to be eligible for a retirement benefit.Different membership classes have different eligibilityrequirements for vesting. Refer to PSERS website.Glossary19
5 N 5th StreetHarrisburg PA 17101-1905psers.pa.govContactPSERS@pa.gov20Let’s Talk about PSERS Death Benefits
6 Let's Talk about PSERS Death Benefits Death Benefits for Vested Members If you are vested, your designated beneficiary(ies) will be eligible for the present value (see glossary) of your retirement account. Death Benefit Payment Options If the death benefit is less than 10,000, payment will be made in a lump sum. The
