The following is a partial explanation of the payment options available to you at the time you retire:
You will receive for your lifetime the maximum monthly retirement benefit available to..you. Upon your death, all payments will cease. Since there are no benefits payable after your death, you do not name a beneficiary.
You will receive for your lifetime a retirement benefit that is less than the maximum available. Each time you receive a benefit check, a prorated amount is subtracted from your employee contribution balance at tbe MSRS. Upon your death, the balance of your contributions, if any, is payable in a single lump sum to your designated beneficiary.
You will receive for your lifetime a retirement benefit that is less than the maximum available. Upon your death, the same monthly retirement benefit will be paid to your designated beneficiary for the remainder of his/her lifetime.
You will receive for your lifetime a retirement benefit that is less than the maximum available. Upon your death, one-half of your monthly amount will be paid to your designated beneficiary for the remainder of his/her lifetime.
You will receive a retirement benefit that is less than the maximum available for your lifetime with another benefit payable to a designated beneficiary at the same time. At your death, your named beneficiary continues to receive the higher benefit. This option is designed on an individual basis, but the option does not allow the benefit to exceed 98% of the actuarial equivalent of the benefits available under the "full benefits" option. Common "Option 4" break downs are 80% or 90% of the benefit to you and 20% or 10% to your designated beneficiary.
· BENEFICIARY DESIGNATIONS
The beneficiary named in OPTION 1 may be changed by you at any time after your retirement. However, under OPTIONS 2, 3, and 4, the beneficiary can only be changed under very limited circumstances involving the death of or divorce from a named spousal beneficiary. This is a provision of the law that can catch a retiree by surprise and is very important to fully understand before you designate your beneficiary. A Retirement Services Specialist can provide details about beneficiary designations.
Our MSRS specialists cannot advise you about which option you should choose or who, if anyone, your beneficiary should be. They can, however, provide you with all the details about how the various options work using your estimated dollar amounts for each option. They can also discuss frankly the very specialized circumstances under which you could name a new beneficiary with the same payment option originally selected.You may wish to consult a financial advisor or attorney to help you choose the option and beneficiary designation that best suit your circumstances.
You may change the option selected at
any time prior to the date of issuance of the first check in payment
of your retirement allowance,. The Option I beneficiary may be
changed at any time after retirement. Beneficiaries designated
under Options 2, 3, and 4, may be changed in the event of the
death of or divorce from the original spouse. The statutes and
rules for this election are complex. Please contact the MSRS office
if you have questions.
EFFECTIVE DATE OF RETIREMENT
Payment of retirement benefits shall begin as of the first day of the month following the month of termination of employment for a member who is eligible to retire. Therefore for a member who is eligible to retire, it appears that it will be best that the date of termination of employment be the last working day of the month.
HEALTH INSURANCE
You must complete the health insurance form if you desire to continue your health coverage as a retiree. If you do not have this coverage or do not wish to continue your health coverage you should complete the back of the form. Whatever your decision concerning your health coverage, you must complete the form and return it to Blue Cross/Blue Shield. CAUTION: Persons who not elect to convert their coverage at the time of retirement will not be eligible to elect this benefit at a later date.
STATE GROUP LIFE INSURANCE PROGRAM
Upon retirement, for reasons other than disability, the average
amount of Basic Life Insurance in force for the last
3 years immediately prior to retirement shall be continued
in ~force at no cost to the participant, if he/she has participated
in the State Group Life Insurance program for a minimum of ten
years. The average amount shall be reduced at the rate of 15%
per year to a minimum of 40% of the average amount or $2,500,
whichever is greater. Accidental death and dismemberment insurance
ceases upon retirement.
CONVERSION INFORMATION
If you are not eligible for continued Basic paid group life insurance upon retirement you may convert to a personal life policy within 31 days from date of termination. Supplemental and Dependent insurance coverage cease upon retirement but may aIso be converted to a personal life policy within 31 days from date of termination. Conversion information may be had by contacting the Life Insurance Division at the Maine State Retirement System.
INCOME TAX- FEDERAL AND STATE
All members retiring must determine the taxable portion of retirement benefits using the "General Rule". The rule and tables necessary to make the determination may be found in l.RS. Publication 575. An important tax information packet will be mailed to you upon receipt of your Application for Retirement indicating relevant information about the option which you have selected.
DIRECT DEPOSIT
Electronic funds transfer (or direct deposit) of your retirement check into your savings or checking account is available upon request. This convenient option assures that there will be no delay in receipt of your monthly benefit due to processing problems or mail service delays and your benefits will be deposited earlier than if you were to deposit them yourself If you wish to like advantage of this convenient option please contact Maine State Retirement System for the necessary forms you need to fill out.
PROVISIONAL RETIREMENT AND ELIGIBILITY FOR BENEFITS
An employee who retires as the result of termination by discharge and who grieves or otherwise contests the discharge is only provisionally retired and is only provisionally entitled to receive retirement benefits following termination pending final resolution as to the discharge. As of the date on which a discharge becomes final, retirement status and entitlement to benefits are no longer provisional. If a provisional retiree is reinstated, the provisional retiree must repay to the Retirement System the full amount of benefits paid for any period covered by the reinstatement