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Retirement Benefit Options

Monthly Benefit Options from Defined Benefit (DB)

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Your options when choosing to receive your DB retirement benefit are: Maximum Single Life Annuity, Option 1, Option 2, Option 3, and Customized.

Maximum Single Life Annuity

​This provides the maximum monthly benefit amount available.  If at the time of your death you have not received an amount equal to your contributions and interest, then the balance is paid to your beneficiary(ies).

Option 1

​Your monthly benefit is reduced and a “Present Value” is assigned to your account.  If at the time of your death you have not received in monthly benefits an amount equal to your account’s Present Value, then the balance is paid to your beneficiary(ies).

Option 2

​Your monthly benefit is reduced based on your age and gender and the age and gender of your survivor annuitant at retirement. At the time of your death, the same monthly benefit is paid to your survivor annuitant throughout his or her lifetime.

Option 3

​Your monthly benefit is reduced based on your age and gender and the age and gender of your survivor annuitant at retirement. At the time of your death, one-half of your monthly benefit is paid to your survivor annuitant throughout his or her lifetime.

Customized Option

​Your monthly benefit is customized as none of the other options meets your needs. This option is subject to certain conditions. You should contact a PSERS regional representative for more information on this option.
Under Options 2, 3, or Customized (if it included a survivor), you may name a new survivor annuitant and/or elect a different option if your marital status changes or your designated survivor annuitant dies before you. PSERS will recalculate your monthly benefit based on your new survivor annuitant’s age and gender and your age and gender at the time of the change. It is possible that your monthly benefit will be further reduced in this recalculation. If your survivor annuitant dies before you and you do not elect a different option, you will continue to receive a reduced monthly benefit. Special rules apply if you are divorced. Contact your local regional office for more information before making a change.

Disability Options

​If you are vested, you may elect the Maximum Single Life Annuity or a survivor annuitant option (Options 2, 3, or Customized). Your beneficiary(ies)/survivor annuitant will receive a benefit based on what you would have received under a regular retirement benefit.

 
 

Distribution Options for your Defined Contribution (DC) Account

If you terminate your public school employment, you may request a distribution of some or all of your vested balance in your PSERS DC Plan account at any time.  Your termination is reported by your employer to PSERS, who then notifies Voya when you are eligible for a distribution.

You can make a distribution request through Voya.  All distributions will be made in cash. If a distribution is an "eligible rollover distribution," as explained in the Public School Employees' Retirement System School Employees' Defined Contribution Plan Special Tax Notice Regarding Plan Payments, you may do a 60-day rollover or a direct rollover of all or a portion of the distribution to an individual retirement account or annuity or another employer retirement plan willing to accept the distribution as explained in the Notice.

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​Distribution options for a distribution of the vested balance in your PSERS DC Plan account:

If your vested balance in your PSERS DC Plan account is greater than $5,000

​You may elect a distribution of your vested balance in the PSERS DC Plan after receipt of your Eligible for Distribution date in one of the following optional forms:

  • A lump sum distribution payable to you.
  • A portion of your vested balance in a single lump sum distribution with the remaining balance distributed in one of the other permitted forms.
  • Payments over a period certain in monthly, quarterly, semi-annual, or annual installments.
  • Purchase an annuity.
  • Alternatively, you may delay the distribution of your vested balance, but you are required to begin distributions once you reach age 70 ½
If your balance is more than $1,000 but is not greater than $5,000

​You must take a single lump sum distribution payable to you or request a direct rollover. If you do not elect either option within 90 days after the date you are eligible for distribution, the vested balance in your PSERS DC Plan account will be automatically rolled over to a Voya IRA in your name. You will be provided with information about the Voya IRA when you become eligible for this distribution from the PSERS DC Plan.

If your balance is $1,000 or less
​You must take a single lump sum distribution payable to you or request a direct rollover.  If you do not elect either option within 90 days after the date you are eligible for a distribution, the vested balance in your PSERS DC Plan account will be automatically distributed in a single lump sum distribution payable to you less applicable federal withholdings.

 

Distributions via check will be generated 2 business days after the request has been processed. Checks will be mailed directly to your address of record. You also may elect to have the proceeds directly deposited to your bank.  Participants are restricted from requesting distributions via electronic transfer to your bank for seven (7) calendar days following any banking information updates. If a distribution is requested by the participant during the seven (7) calendar day wait period, a check will be issued instead.

Your payment from the PSERS DC Plan will be taxable income, excluding after-tax contributions, for federal income taxes if you do not roll it over. If you do not request a direct rollover, the PSERS DC Plan is required to withhold 20% of the taxable portion of the payment for federal income taxes. If you are a nonresident alien and you do not request a direct rollover to an eligible retirement plan, instead of withholding 20%, the PSERS DC Plan is generally required to withhold 30% of the taxable portion of the payment for federal income taxes.  If you are under age 59½ and do not request a rollover, you will also have to pay a 10% additional federal tax on early taxable distributions (generally, taxable distributions made before age 59½), unless an exception applies.  If, however, you request a rollover, you will not have to pay federal tax until you receive the taxable payments and the 10% additional tax will not apply if those taxable payments are made after you are age 59½ (or if an exception applies).

Whether you can rollover your distribution to another plan depends upon whether the plan receiving the money allows rollover money into the plan.

Note: The rules governing distribution in a transferee plan may be different than the rules governing the PSERS DC Plan from which a rollover originated. The PSERS DC Plan's withholding rules for distributions may apply to rollover money from other qualified plans.

Distribution choices and rules are complex. You are encouraged to talk with your tax advisor or financial planner before deciding how to take your distribution.  To read more about distributions, visit "Getting Your Money" in the "Retirement" section of Education & Tools on the Voya website.