RETIREMENT OPTION SELECTIONS

  • Life Annuity - Retirement annuity payable monthly only to the member for life with no survivor benefits. 
  • 100% Joint and Survivor Annuity - Retirement annuity payable monthly as long as the member lives. Upon the member's death, the designated survivor will receive the same annuity amount until the time of their death. 
  • 50% Joint and Survivor Annuity - Retirement annuity payable monthly as long as the member lives. Upon the member's death, the designated survivor will receive one-half the annuity amount until the time of their death. 
  • 66-2/3% Joint and Survivor Annuity - Retirement annuity payable monthly as the member lives. Upon the member's death, the designated survivor will receive two-thirds the annuity amount until the time of their death. 
  • Joint and 66-2/3% Last Survivor Annuity - Retirement annuity payable monthly as long as the member lives. At either the member's death or the death of their survivor, the last survivor of the two will receive two-thirds of the annuity amount until the time of their death. 
  • Fifteen year Certain and Life Annuity - Retirement annuity payable monthly as long as the member lives. If their death occurs before they have received 180 payments, their designated survivor or estate will receive the remaining number of monthly payments. If the member is still living after receiving the 180 payments, payments will continue until their death.
  • Retroactive Deferred Retirement Option Plan (Retro DROP) - Lump Sum, with Reduced Monthly Benefit. To be eligible, the member must have had at least 23 years of creditable service by March 31, 2015.
  • Forward Deferred Retirement Option Plan (Forward DROP) - One-time benefit that allows active Group A members to defer their annuity benefit payment into a DROP account while still working and before actual retirement. To be eligible for enrollment in the Five Year Forward DROP, Group A members must have had at least 23 years of creditable service by February 17, 2016. Group A members who have at least 23 years of creditable service after February 17, 2016 will only be eligible for the Seven Year Forward DROP.

*On each option document, the following statement will appear. "In selection of this option, I have not relied upon the Austin Police Retirement System for legal advice, including, but not limited to, tax consequences under the Internal Revenue Code of 1986, as amended. I understand that there are legal and tax consequences in the selection of an option and I have been advised to consult my own tax and legal advisors prior to selection of this option."

 

FAQs

Can I pre-select a survivor?

A member may pre-select a survivor option within one year prior to their retirement eligibility date by filing an Annuity Option Election Form with the System. A member may change that election until the date of retirement. In the event of the member's death before retirement but after becoming eligible for retirement, their designated survivor's benefit will be calculated as if they had retired and selected such option. This is especially important if the member is not legally married and plans to elect a survivor option. To pre-select a survivor option, please contact the System.

Who can I leave my benefits to?

The System allows a member to select a survivor to receive their monthly retirement benefits. However, IRS rules for the selection of a survivor to receive an annuity option must be followed. Annuity options are limited if the member chooses a survivor who is not their legal spouse if there is more than a 10 year age gap between the member and their designated survivor. 

The options that include benefits to a survivor are figured according to the ages of both the member and their survivor. The member's benefit is permanently reduced if an option is chosen that provides survivor benefits. This reduction is applied to the member's basic benefit relative to the option they choose. The reduction of their benefits is necessary to pay for the continued benefits the survivor is expected to receive.

If a member selects the Life Annuity, the monthly benefit stops at their death. At that time, an amount equal to the excess, if any, of their accumulated deposits over the amount of payments made to them in retirement will be paid in a lump sum to the their designated beneficiaries or estate. 

If a member chooses an option providing benefits to a survivor, then at their death the benefit specified in the option will be paid to the designated survivor for life. If the designee does not survive the member, monthly benefits cease upon their death. The amount equal to the excess, if any, of their accumulated deposits over the amount of payments which have been made to both the member and the member's survivor combined will be paid in a lump sum to other designated beneficiaries, or to the estate of the deceased member.

How will I receive benefits?

A member can choose to receive a monthly pension benefit payable to the member or defer their monthly pension benefit into a PROP account. If the member has a DROP account at retirement, they may take part or all of their money (subject to IRS rules) or choose to leave their money in PROP.

When do my benefits start?

The Board of Trustees reviews and approves all retirements during its monthly meetings. A member's first benefit payment will be paid on the last day of the month immediately proceeding the month in which the member retires. Payments will be made at the end of each month thereafter.