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Your Payment Options

​Whenever you see a retirement estimate on self-service, in office, or through the mail, you can learn about the options available to you. When you do retire, you can select a payment option that best suits your particular needs.  After your retirement date, you cannot change either your payment option or beneficiary.  As a result, it is very important to go over all the contingencies involving your payment, and make sure your beneficiary is aware of your retirement decisions.

Did you know you have choices?

KRS currently offers the following payment options upon your retirement. As some are based on your age at retirement, as well as the age of your beneficiary (if not your spouse), you may not be eligible to choose from all of them. 

Note - All monthly payment options offered are lifetime benefits to you, the retiree. This means you will receive a monthly payment every month for the rest of your life, regardless of your lifespan.


This option provides a monthly benefit to you until your death. It does not provide any benefits to your beneficiary after your death. It is typically the highest monthly payment option available at retirement.
If you are under age 76 at the time of retirement, you may choose this option. The is a lifetime payment to you, the retiree. However, if you pass away within ten years of your retirement date, KRS will continue to pay your beneficiary for the remainder of that ten year period. At the end of the ten year period, the payments to your beneficiary cease. Note:  If both you and your beneficiary die before the 10, 15, or 20-year period ends, the estate of the last surviving person would be entitled to any remaining benefits in a lump sum.
If you are under age 68 at the time of retirement, you may choose this option. The benefit is a lifetime payment to you, the retiree. However, if you pass away within fifteen years of your retirement date, KRS will continue to pay your beneficiary for the remainder of that fifteen year period. At the end of the fifteen year period, the payments to your beneficiary cease. Note:  If both you and your beneficiary die before the 10, 15, or 20-year period ends, the estate of the last surviving person would be entitled to any remaining benefits in a lump sum.

If you are under age 62 or younger at the time of retirement, you may choose this option. The benefit is a lifetime payment to you, the retiree. However, if you pass away within twenty years of your retirement date, KRS will continue to pay your beneficiary for the remainder of that twenty year period. At the end of the twenty year period, the payments to your beneficiary cease. Note:  If both you and your beneficiary die before the 10, 15, or 20-year period ends, the estate of the last surviving person would be entitled to any remaining benefits in a lump sum.
This option guarantees a monthly benefit to you for your lifetime. If you die before your beneficiary, your beneficiary is eligible for the same monthly benefits until death. This option provides a monthly benefit after your death and will allow your beneficiary to participate in the medical insurance program. This option is available only if you and the beneficiary meet certain age requirements.
This option guarantees a monthly benefit to you for your lifetime. If you die before your beneficiary, the beneficiary is eligible for a monthly benefit equal to 66 2/3% of your last monthly benefit until your beneficiary's death. This option provides a monthly benefit after your death and will allow your beneficiary to participate in the medical insurance program.  This option is available only if you and the beneficiary meet certain age requirements.
 
This option guarantees a monthly benefit to you for your lifetime. If you die before your beneficiary, your beneficiary is eligible for a monthly benefit equal to 50% of your last monthly benefit until their death. This option provides a monthly benefit after your death and will allow your beneficiary to participate in the medical insurance program.
 
This option guarantees a monthly benefit to you for your lifetime. If you die before your beneficiary, your beneficiary is eligible for the same monthly benefit until their death. However, if your beneficiary dies before you, or your beneficiary is your spouse and you divorce after retirement, your monthly benefit "pops up", or increases, to the amount under the Basic/Annuity option and any past applicable cost of living adjustments are applied to this amount. This option provides a monthly benefit after your death and will allow the beneficiary to participate in the medical insurance program.  This option is available only if you and the beneficiary meet certain age requirements.
 
This option provides a one-time lump sum payment to you that is the actuarial equivalent of the amount you would have received had your benefits been paid over 60 months. Be especially careful when considering this payment option. By selecting this option, you forfeit all other benefits, including health insurance benefits and the $5,000 death benefit. Because this is a lump-sum payment, all contributions and leave balances must be certified by the employer before payment can be made. If you are a Tier One or Tier Two member, your refund amount will be the total of your contributions and interest if that amount is higher than the actuarial lump sum.  Tier Three members are also not eligible for the Actuarial Lump Sum, only the total of contributions and associated interest.
 
Note: This is a retirement benefit, not a refund of your account. An individual electing this payment option cannot repay the actuarial refund if employed with a participating employer at a later date. If selecting this option, you may be subject to additional tax penalties.
 
If you are interested in the Social Security Adjustment Option, you should complete a Form SSA-7004. You are responsible for sending the Social Security information to our office. Upon receipt, we will mail you a revised estimate of your benefits. You must also be under age 62 to choose a Social Security Adjustment Option. The Social Security Adjustment Options allow you to receive a higher monthly payment from your retirement date to your 62nd birthday, at which time your payment will drop, based on your age 62 Social Security payment.  The Social Security with Beneficiary Option is available only if you and the beneficiary meet certain age requirements.
 

This option provides a monthly payment guaranteed for 120 months to the member, or if the member dies, to the beneficiary for the remainder of the 120 months. After the 120-month period, the member still retains the insurance benefit but is no longer eligible for any other benefits. This benefit pays a high monthly amount, but only for 10 years. After 10 years, this benefit ceases altogether and neither the member nor the beneficiary will receive further payments. In addition, after the end of the 10 years, there will be no $5,000 death benefit payment at the time of the member’s death. For this option, the member may name a single person, trust, or estate as beneficiary. This option is only available for Tier One and Tier Two SPRS members or KERS or CERS members in hazardous positions. It is not offered to members who have hazardous and nonhazardous service in the same system, or Tier Three members.

Remember:  You do not have the right to change your beneficiary after the first day of the month in which you receive your first benefit payment. Your estate becomes your beneficiary if your beneficiary’s date of death precedes or coincides with your date of death. Your estate also becomes your beneficiary if your spouse was designated as your beneficiary and you become divorced after retirement.



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