Payout Options — Annuities

Life Annuity
Under an annuity plan, your monthly benefit is based on life expectancy factors and the amount you annuitize. There are three basic plans of payment:

Plan I — Single Life Annuity
Plan II — Joint and Survivor Annuity
Plan III — Annuity Certain

Plan I — Single Life Annuity
This plan provides maximum monthly benefits for your lifetime. This plan does not provide any payment to a survivor upon your death. At your death, if your total monthly benefit payments were less than your contributions, your remaining contributions will be paid to your beneficiary.

At retirement, if you select the Single Life Annuity plan and later marry, you may change this plan to a Joint and Survivor Annuity with your spouse as beneficiary. This is the only circumstance in which you may change a Single Life Annuity plan.

Plan II — Joint and Survivor Annuity
Under the Joint and Survivor Annuity, you receive a lifetime benefit. Upon your death, one or multiple primary beneficiaries receive lifetime monthly benefits. Because survivor income protection is provided, your monthly benefit is less than under a Single Life Annuity.

Under this plan of payment, there are three basic options.

Option 1
Upon your death, the primary beneficiary receives the same monthly benefit you received.

Option 2
Upon your death, the primary beneficiary receives one-half the monthly benefit you received.

Option 3
Upon your death, the primary beneficiary receives a specific dollar amount or percentage that you designate. The amount you designate must be at least $50 per month and cannot exceed 100% of your benefit.

If the primary beneficiary is not your spouse, the Internal Revenue Service may limit the percentage of the benefit that you can designate to this person.

Contact STRS Ohio for additional information on these limitations.

Under the three Joint and Survivor Annuity options, there are two basic choices.

With reversion: If you select this choice, you may revert to the Single Life Annuity plan of payment if:

• Your beneficiary dies before you. The effective date of the new benefit amount is the first day of the month following the beneficiary’s death.
• Your marriage to the beneficiary terminates, provided that you have written consent from your former spouse or the appropriate court documentation authorizing such a change. The new selection is effective on the latter of the date the application is received by STRS Ohio or the date of divorce.
• A non-spouse is named at retirement and you later marry. You may reselect your new spouse as the new beneficiary.

Without reversion: With this choice you may never revert to a Single Life Annuity payment. Neither the plan of payment nor the primary beneficiary may be changed after retirement. You maintain this plan of payment even if your beneficiary dies or your marriage to the beneficiary terminates.

With Options 1 and 2 you can select a guarantee feature that provides benefit protection to a secondary beneficiary for a specific number of years from your retirement date. A guaranteed period is provided at no cost based on the age of both you and your beneficiary. You may extend the guaranteed period by taking a reduction in your monthly benefit amount. The guaranteed period may be any number of years up to an actuarially determined maximum.

If both you and your primary beneficiary die before the end of the guaranteed period, a monthly benefit is paid to the secondary beneficiary for the remainder of the guaranteed period. If you name more than one secondary beneficiary, a lump-sum payment, representing the present value of the remaining payments, is divided equally and paid to the beneficiaries.

If you or your primary beneficiary outlive the guaranteed period, benefits continue for your lifetime and the lifetime of your primary beneficiary, but the secondary beneficiary is no longer protected.

Plan III — Annuity Certain
The Annuity Certain plan provides benefits for your lifetime. In addition, your beneficiary is protected for a specific number of years from your retirement date. The guaranteed period may be any number of years up to an actuarially determined maximum.

If your death occurs before the guaranteed period ends, your beneficiary receives the same monthly benefit until the guaranteed period expires. If you name more than one person as beneficiary, a lump-sum payment, representing the present value of the remaining payments, is divided equally and paid to the beneficiaries.

If the beneficiary is a legal entity such as a charity, church, etc., then any remaining payments will be made as a lump sum of the present value of the remaining payments.

If you outlive the guaranteed period, benefits continue for your lifetime but the beneficiary is no longer protected.

If you choose the Annuity Certain plan at retirement, you cannot reselect a different plan after retirement. However, you may name a different beneficiary for the remaining years on the guaranteed period.