Q&A: Naming a designee to receive payments that are due upon your death, if any
Who may name this type of designee, and what will the designee receive?
You may name this type of designee if you are currently receiving a benefit as an:
- Option A retiree or survivor of an MTRS member, your designee will receive the lump-sum payment of any benefits that you earn in the month of your death and that have not been issued to you.
- Option B retiree, your designee will receive: the lump-sum payment of the remainder of your annuity savings account, if any, upon your death; and, any benefits that you earn in the month of your death and that have not been issued to you.
What are “benefits due in the month of my death”?
Retirement and survivor benefits are paid for time already accrued. In other words, the allowance that you receive at the end of January is the payment for January. If you, the benefit recipient, pass away before the end of the month and:
- we are able to stop that month’s check/direct deposit from being mailed or deposited, we will then calculate the amount of benefits that you earned for that month—in other words, benefits for the days in that month that you were alive—and then pay that lump-sum amount to your primary designee(s) according to the percentage(s) listed.
- we are not able to stop that month’s check/direct deposit from being mailed or deposited, we will then calculate the amount of benefits that were overpaid to you for that month—in other words, benefits paid for any days in that month after your death—and will recover the overpayment from your estate. In this event, no month-of-death payment will be due to your designee(s).
- retired under Option A, and was not asked to name a beneficiary because my monthly benefits cease upon my death.
- retired under Option B many years ago and the person I designated as my beneficiary has since passed away. I understand that my annuity savings account balance has long been “spent down,” and there will be no lump-sum survivor benefit payment due upon my death.
- receive a monthly survivor benefit and was not asked to name a beneficiary because my monthly benefits cease upon my death.
Why should I name a designee now?
As explained above, retirement payments are made at the end of each month for that month; the portion of your monthly payment that you earn in the month of your death (the “pro-rata amount”) is payable to your estate. Some survivors may choose not to go through the paperwork and potential expense of obtaining a taxpayer identification number, establishing a bank account for the estate and probating the estate, in order to collect the retiree’s final benefit payment. However, if you designate someone to receive the “pro-rata amount” due in the month of your death, we can issue payment directly to your designee rather than your estate.
Can I change my designation at any time?
Yes—your current designation will remain in effect unless and until you file a new Beneficiary Designation Form for Retirees and Survivors with the MTRS, which you may do at any time. Your new form will then supersede any previous designation.
Note: Do NOT use this form if you are an…
- active member (instead, see Survivor benefits for active members) or
- Option C retiree. At the time of your retirement, you designated your Option C beneficiary, and your Option C beneficiary cannot be changed. If your Option C beneficiary predeceases you, you may not name a new Option C beneficiary; your monthly benefit will “pop up” to the Option A benefit amount that you would have received on the date of your retirement, plus any cost-of-living adjustments. If your Option C beneficiary has predeceased you, please notify us as soon as possible so that we may adjust your benefits.