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CalPERS details preretirement lump‑sum and monthly survivor benefits
Summary
The presentation described types of preretirement death benefits available through CalPERS, eligibility conditions, employer contract requirements, and example amounts for certain components such as group term life insurance.
Presenter, California Public Employees' Retirement System (CalPERS), listed the main categories of preretirement survivor benefits and the factors that determine eligibility, including membership category, employer contract, and separation date.
Why this matters: the specific benefits payable to survivors depend on a combination of member status, employer contracts and statutory order; survivors and beneficiaries should confirm what applies to the member at death.
CalPERS distinguished lump‑sum and monthly benefits. Lump‑sum benefits discussed included the limited death benefit, the basic death benefit, and group term life insurance. The presenter said the limited death benefit is payable to an inactive member’s designated or statutory beneficiary and pays the member’s contributions plus interest if the member had been separated for more than 120 days and separation was not due to an injury or illness that prevented the member from working. The basic death benefit pays an active member’s contributions and interest and can also pay up to six months of salary; it is payable if no one eligible for a monthly allowance chooses that allowance or if a person eligible for a monthly allowance elects the basic death benefit instead.
For state members, the presenter said the group term life insurance consists of a tax‑free $5,000 amount plus an amount equal to six months of salary; tax treatment may vary depending on retiree eligibility. The presenter said multiple benefits can be payable to the same survivors (for example, group term life insurance and a preretirement Option 2W death benefit), and that when there are multiple beneficiaries the lump sum is divided equally among them unless a designation specifies otherwise.
Monthly benefits described included the preretirement Option 2W death benefit (a monthly allowance based on what the member would have received had they retired and elected the 100% option), the "1957 survivor benefit" (described in the presentation as paying 50% of an unmodified allowance under specified conditions), the special death benefit (a monthly allowance equal to 50% of final compensation, potentially increasing to 75% when there are eligible children), and the alternate death benefit (available to certain state members who meet minimum age and service requirements and to public‑agency firefighters if contracted by the employer).
The presenter emphasized that some benefits require the employer to contract for them (for example, sick‑leave conversion, alternate death benefit for some public agencies, and some public‑agency special death benefits) and that school and state members are covered under a particular level of the 1959 survivor benefit while public agencies may contract for other levels.
Ending: The presenter recommended members check their myCalPERS account for membership category and consult the member benefit publications (Publication 3 for school, Publication 4 for state, Publication 5 for public agencies) for full details on which benefits apply.
