Payment Plan Options (N, C, D)
Before monthly pension payments may be initiated there is a prescribed application procedure. Please go to Frequently Asked Questions (FAQs) and select Filing for Retirement for the necessary forms and instructions. Once an application for retirement is complete, we are required by law to initiate benefits no later than the third month following the effective date of retirement. Your pension will be paid to you on a monthly basis.
Your pension income will be payable to you for your lifetime. The payment plan you choose for retirement determines whether benefits will be provided to your beneficiary upon your death.
In addition to choosing a payment plan, you will be required to select the method of payment for your 1% and voluntary accounts if applicable. You may opt to receive these funds in a lump sum, as an added monthly annuity, or applied towards the purchase of additional credited service. For further information on these choices, obtain the 1%/Voluntary Bulletin (PDF 82KB).
Payment Plan N (Partial Refund Option)
Plan N provides you with the largest benefit. In the event of your death, your designated beneficiary would receive a lump sum payment of your contributions and interest to the date of your retirement, less twenty-five (25%) percent of the total payments received to your date of death.
Plan N Example: At the time of your retirement, you had $325,000 in your membership account with CTRB. Letís assume you die after receiving $100,000 in total retirement benefits. The amount your beneficiary would receive would be determined as follows:
|Starting Account Balance:
|Total Benefits Received:
|25% of Total Benefits Received:
|Lump Sum Payment to Beneficiary:
Payment Plan C (Period Certain and Continuous)
Under this plan you agree to take a reduced benefit during your lifetime with a certain number of payments guaranteed. You may choose a guaranteed period of 5, 10, 15, 20 or 25 years.
These payments will continue to be paid to you for your lifetime even if you outlive the period certain guaranteed. Should you die before receiving all of your guaranteed payments, your beneficiary will receive the remaining monthly payments until the end of the selected period. Should your beneficiary die before receiving all of the payments due, a lump sum payment of the value of the remaining payments due would be issued to his/her Estate.
The Plan C and Plan D Factors below can be used to determine your monthly benefit based on the period certain selected. These percentages are to be applied to your Normal benefit which you have previously calculated.
Plan C Example: You have determined that your normal benefit would be $3,000 monthly. Let us assume you are retiring at age 60 and wish to elect a Plan C 20 year option.
Your benefit would be: $3,000 X 94.5% = $2,835
If you died after seven years, your designated beneficiary would receive the monthly payment for the remaining 13 years. Should your beneficiary die before receiving all of the payments due, a lump sum payment of the value of the remaining payments due would be issued to his/her Estate.
Payment Plan D (Co-participant Option)
Under this plan you agree to take a reduced benefit with the guarantee that upon your death, your Co-participant will receive a selected portion of your monthly benefit for life.
You may choose to have 100%, 75%, 66.6%, 50% or 33.3% of your benefit continue to your Co-participant upon your death. The benefit is payable over two lifetimes - yours and your Co-participantís. The amount you will receive will be influenced by your age, the age of your Co-participant, and the portion of your benefit that you wish to continue to your Co-participant. As of July 1, 1998, there is no physical examination required for this plan and you may name any person as your Co-participant.
Use the Plan C and Plan D Factors below to determine your potential benefits under the various Plan D options. These percentages are to be applied to your Normal benefit which you have previously calculated.
Plan D Example: You have determined that your normal benefit would be $3,000 monthly. Letís assume you are retiring at age 60 and wish to elect a Plan D 75% option for your spouse who is age 55.
Your benefit would be: $3,000 X 89.5% = $2,685
Upon your death, your Co-participant would receive for life, 75% of your monthly benefit as follows:
$2,685 X 75% = $2,013.75
Plan D benefits effective on or after January 1, 2001 have a partial refund feature. In the event that the member and Co-participant die before the funds have been depleted, a lump sum of any remaining balances in the account will be issued. This death benefit will be calculated in the same manner as Plan N, Normal Allowance. Monthly benefits cease upon the second death. Plan D benefits that became effective on or after July 1, 1982 include a provision that should your Co-participant predecease you or you become divorced from your Co-participant, your benefit would "pop-up" to the unreduced benefit. All monthly payments would cease upon your death.
Plan C and Plan D factors are available below.
Current Plan C and Plan D Factors effective January 1, 2009 (XLS 665KB)
Content Last Modified on 7/25/2013 1:26:15 PM