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SERS Death Benefit

 

Report the Death of 
a SERS Member

 Key Terms 

Beneficiary

The persons or organizations you last designate in writing to SERS to receive any Death Benefit payable from your account. It is important that you keep your Beneficiary designation up to date. If you nominate your spouse as your Beneficiary and later divorce, you should file a new Nomination of Beneficiary form. Whether your pre-divorce designation of your spouse as a Beneficiary would be effective under the Pennsylvania Probate, Estates and Fiduciaries Code will depend on the date of your designation and your state of residency at the time of your death.

   

Designated Survivor/

Survivor Annuitant

A Designated Survivor or Survivor Annuitant is the person who you name to receive a lifetime annuity upon your death when retiring under Option 2 or 3 or under Option 4 with a Joint and Survivor Annuity.

The Death Benefit, if any, payable on your SERS retirement benefit is determined by your SERS membership status at your time of death; and if retired at your time of death, the benefit payment option you selected when you retired. 
 
 
Death in State Service
If you die in State service before Normal Retirement Age with less than 5 years of Credited Service (Non-Vested), your Accumulated Deductions will be paid to your Beneficiaries. If your Accumulated Deductions are less than $10,000, a lump sum payment will be made; if your Accumulated Deductions are $10,000 or more, your Beneficiaries may select a lump sum, installment payments or one of a variety of annuity types.
 
If you die while employed and are a Vested Member eligible to receive a SERS monthly pension (you have reached your Normal Retirement Age and have at least 3 years of Credited Service or you have 5 or more years of Credited Service regardless of whether you have reached Normal Retirement Age), it will be assumed that you retired under Option 1 the day before your death and the Present Value of your account will be paid to your Beneficiaries. If the Present Value of your account is less than $10,000, a lump sum payment will be made; if the Present Value of your account is $10,000 or more, your Beneficiaries may select a lump sum, installment payments or one of a variety of annuity types.

  

If you do not want the automatic Option 1 to apply in the event of your death in State service, you may choose one of the other options. To do this, please contact your Retirement Counselor at 1-800-633-5461.

  

  

Death on Annuity

If you die while on annuity, the death benefit payment, if any, will depend on the annuity payment plan you selected at retirement. Following is a list of SERS retirement options and the implications for your Beneficiaries or Designated Survivor.

  

Maximum Single Life Annuity (MSLA) 

The Maximum Single Life Annuity is the basic SERS retirement benefit and provides you a monthly annuity for as long as you live. Under this option your monthly annuity benefit ceases at your death. The only amount payable after your death is: 1) the portion of your monthly benefit owed for the number of days you were alive in the month you die; or, 2) if you did not withdraw your contributions and interest at retirement, the balance of that amount less any monthly payments SERS made to you. The payment for days you were alive in the last month will be made to your estate. The balance of your contributions and interest, if any, will be paid to your designated Beneficiaries.
 

Option 1

Provides you a monthly annuity for as long as you live. If the sum of all payments SERS made to you prior to your death totals less than the Initial Present Value of your account at the time of retirement, the difference will be paid to your designated Beneficiaries. In addition, SERS will pay to your estate the portion of your monthly benefit owed for the number of days you were alive in the month you die.  Under Option 1, if at the time of your death the amount of payment due any Beneficiary is less than $10,000, it will be paid in a lump sum. If the amount due a Beneficiary is $10,000 or more, the Beneficiary may choose to receive a lump sum or select one of several monthly payment plans. The choice of payment plan will be up to your Beneficiaries.  

 

Option 2 

Provides you a monthly annuity for as long as you live and, following your death, provides your Designated Survivor with an equal monthly lifetime annuity. Under this option, once you retire you cannot change your option selection or your designated Survivor Annuitant unless your survivor predeceases you, you divorce or you marry. Contact your Regional Retirement Counseling Center at 1-800-633-5461 for additional information.

 

The Option 2 benefit is computed using both your age and the age of your Designated Survivor at the time of your retirement. Proof of age documents are required under Option 2 for you and your Designated Survivor. The younger your Designated Survivor, the more severe the reduction to your monthly benefit.
 

Option 3

Provides you a monthly annuity for as long as you live and, following your death, provides your Designated Survivor with a lifetime monthly annuity of approximately one-half of your monthly annuity. Under this option, once you retire you cannot change your option selection or your designated Survivor Annuitant unless your designated Survivor Annuitant predeceases you, you divorce or you marry. Contact your Regional Retirement Counseling Center at 1-800-633-5461 for additional information.


The Option 3 benefit is computed using both your age and the age of your Designated Survivor at the time of your retirement. Proof of age documents are required under Option 3 for you and your Designated Survivor. The younger your Designated Survivor, the more severe the reduction of your monthly benefit.  

Special Option 4
Provides you a monthly annuity designed to your specific requirements, according to limitations and subject to SERS approval.

Under a Special Option 4 you may design your own monthly payment plan and provide annuities for your Beneficiaries or Designated Survivor. Any plan you design must be actuarially sound. Annuities for your Designated Survivor may not be greater than 1½ times the annuity payable to you. SERS requires the filing of a Supplemental Special Option Description (SERS-129S) form, providing information about your Beneficiaries or Designated Survivor and a complete description of the proposed method of distribution.
  

 

Taxes Affecting Death Benefits

Questions about federal estate taxes on Death Benefits that may be payable to your Beneficiaries should be directed to the IRS or a professional tax consultant. Beneficiaries of SERS Death Benefits are not liable for Pennsylvania inheritance tax.  

  
  
  

Related Information/Links

IRS Homepage



Last published: 08/01/2011 07:20 PM