If you apply for disability retirement, you will choose how you want to receive your benefit. The payout options are the Basic Benefit and Survivor Option. The payout option you elect is irrevocable. That means you cannot change it after you retire, with the exception of the Survivor Option under some conditions. Note: The Partial Lump-Sum Option Payment (PLOP) and the Advance Pension Option are not available to members who retire on disability.
The Basic Benefit is based on your average final compensation at retirement and whether you are retiring on non-work related or work-related disability. The benefit amount is adjusted by any Social Security disability benefits or workers' compensation benefits you are eligible to receive. The Basic Benefit does not provide a continuation of a benefit to a survivor. However, your beneficiary may be eligible for a lump-sum payment of any funds remaining in your member contribution account upon your death.
With this option, you elect to receive a lower monthly benefit during your retirement so that your survivor can receive a monthly benefit after your death. If you elect this option, you will choose a whole percentage of your benefit, between 10% and 100%, to go to your survivor. Your benefit amount will be based on this percentage, your age and the age of your survivor at your disability retirement date.
You can name any living person as your survivor; you also can name more than one survivor. The Internal Revenue Service (IRS) may limit the amount of your benefit that can go to a non-spouse survivor. For additional information including a chart on maximum survivor option percentages, contact the IRS toll-free at 800-829-1040 or visit the IRS website.
Changing the Survivor Option
You can name a new survivor or revert to the Basic Benefit if:
- Your survivor dies;
- Your survivor is your spouse and you divorce with fewer than 20 years of marriage;
- Your survivor is your spouse, you divorce after 20 or more years of marriage and your spouse dies, remarries or consents in writing to a change in benefit; or
- You provide VRS written consent from your survivor giving up claim to a benefit along with proof of your survivor's good health.
If you are divorced and VRS has an Approved Domestic Relations Order (ADRO) on file, your benefit must be paid as directed by the ADRO.
You can change your survivor only once. If you elect the Survivor Option and need to change your survivor after you retire, call VRS toll-free at 888-827-3847 for assistance.