Beneficiary & survivor benefit
Your status at the time of death (before or after you are collecting a monthly retirement/disability benefit), determines how your assets will be paid and to whom (a beneficiary or survivor).
It is important that you understand the difference between a beneficiary and survivor and the benefits they are eligible for upon your death.
The purpose of a beneficiary designation is to determine settlement of your MSRS pension plan in the event your death occurs:
before you begin collecting an MSRS retirement benefit payment;
while collecting a retirement benefit, but you elected the single-life option; or
while collecting a disability benefit, but you did not choose a survivor option.
Two ways to designate beneficiaries
1. Statutory succession of beneficiaries ("by law")
This option automatically applies to your account unless you complete a Beneficiary Designation form to name a beneficiary.
Under retirement law (M.S. 352), if no beneficiary has been designated or your designated beneficiary pre-deceases you, any money payable from MSRS must be paid in the following order:
a) surviving spouse; or if none,
b) surviving children in equal shares; or if none,
c) surviving parents in equal shares; or if none,
d) representative or your estate
2. Designate primary and/or contingent beneficiaries by name
If the statutory succession of beneficiaries does not meet your needs, you may complete a Beneficiary Designation form to name your beneficiaries. The designation is effective when a properly completed form is received by MSRS and supersedes any prior beneficiary designations that you have filed.
Primary Beneficiary. Upon your death, benefits will be paid in accordance with state statute to your primary beneficiary(ies). If you name two or more primary beneficiaries and any one of them pre-deceases you, the entire benefit will be paid to the surviving primary beneficiary(ies).
Contingent Beneficiary. Upon your death and none of the primary beneficiaries outlive you, benefits will be paid in accordance with state statute to the contingent beneficiary(ies). if you name two or more contingent beneficiaries and any one of them pre-deceases you, the entire benefit will be paid to the surviving contingent beneficiary(ies).
Who you can name as your beneficiary
Anyone can be your beneficiary; they do not have to be related to you. You can also name your estate, trustee, or charitable organization. If you are married, your spouse is automatically the beneficiary, regardless of who you name as your beneficiary, unless your spouse acknowledges your election by signing the spousal waiver on the Beneficiary Designation form.
Benefits paid upon your death
The following assumes you die before retirement (while still working) and that you were vested.
If survived by a spouse, they can choose from these payout options:
- Monthly payments for their lifetime
- Monthly payments for a period of 10, 15, or 20 years
- Lump payment of the retirement deductions taken from your salary plus interest
Note: spousal coverage is automatic unless you completed a Beneficiary Designation form naming someone else and your spouse signed the Spousal Waiver section of the form to acknowledge your election.
If survived by dependent child(ren), they may receive a monthly benefit payment. Benefit will be paid until age 20, or for five years, whichever is longer.
If not survived by spouse or dependent child(ren), a lump-sum payment of your retirement deductions taken from your salary plus interest is paid in the following order: beneficiary; child(ren) in equal shares; parents in equal shares.
A survivor is the person who will receive a monthly retirement benefit if your death occurs after you begin collecting a retirement or disability benefit and you chose a Joint-and-Survivor or Life Income, 15-Year Certain option.
If your death occurs after you begin collecting a retirement benefit, your designated beneficiary is no longer eligible for a refund of your account balance unless you chose the Single-Life benefit option at retirement.
If you choose:
Joint-and Survivor benefit option (50, 75, or 100%): Your survivor will receive monthly payments for the remainder of their life. Payments to your survivor will begin the month after MSRS is notified of your death.
Life Income, 15-Year Certain Option: Monthly payments for the balance of the 15-year term. If you received benefits for more than 15 years, the survivor will not receive any monthly payments.
Single-Life Option: Benefit ends. The remaining account balance, if any, will be paid to your named beneficiaries or as stated in statute ("by law").
To learn more, see Retirement Benefit Options.
Who you can name as your survivor
Typically your spouse is the survivor; however, you can name anyone as your survivor, provided your spouse agrees in writing on the application for retirement to waive their survivor benefit.
You can change your benefit option or named survivor up to 30 days after the date your retirement benefit begins. After that you may not change the survivor option election.
If your named survivor predeceases you
It is important to notify MSRS of your survivor's death so we can adjust your monthly benefit, if necessary. If you choose:
Joint-and-Survivor benefits (50, 75, or 100%): monthly retirement benefit will increase to the Single-Life benefit amount the month after MSRS is notified of your survivor's death. You cannot add another survivor to your account.
Life Income, 15-Year Certain: survivor's death has no impact on your benefit. You can name another beneficiary to receive payments if you die before receiving payments for 15 years.