Per Massachusetts General Law, Chapter 32 §12, the retirement law of Massachusetts, you can choose to receive the payment of a monthly retirement allowance via one of the three options listed below:
Option “A”: This option provides for a lifetime retirement allowance to the retiree. Upon the death of the retiree, this retirement allowance would cease, and the beneficiary would receive the pro-rated portion of the final month’s retirement allowance.
Option “B”: This option provides for a lifetime retirement allowance to the retiree. Typically, this retirement allowance is slightly less when compared to the Option “A” retirement allowance. Upon the death of the retiree, this option provides for a lump sum distribution of the retiree’s remaining annuity, if any, to the named beneficiary. On average, a retiree’s annuity will last about 10-12 years into retirement. If the retiree dies prior to those 10–12 years, the named beneficiary will receive a one-time lump sum distribution of any funds remaining in the retiree’s annuity savings account, if any. If the retiree dies after those 10-12 years, the named beneficiary will receive the pro-rated portion of the final month’s retirement allowance.
* Note: There are no restrictions on who or how many individuals may be named as the beneficiary.
Option “C”: This option, commonly referred to as the joint and last survivor allowance, provides for a lifetime retirement allowance to the retiree. Typically, this retirement allowance is reduced more and is less than the Option “A” or Option “B” retirement allowance. Upon the death of the retiree, this option provides for a lifetime retirement allowance to a named beneficiary in the amount of 2/3 of the retiree’s Option C retirement allowance. If the named beneficiary should pre-decease the retiree, upon the date of death, the retiree will “pop-up” to his/her Option A retirement allowance.
* Note: The named beneficiary must be the member’s parent, sibling, child, spouse or former spouse who has not remarried.
If you are married, your spouse must accompany you so that he/she can be informed of your options and your option choice. If this is not possible, a form will be forwarded to your spouse informing them of the option that you have chosen and the estimated retirement allowance under each of the three options. Payments of a retirement allowance are made, via direct deposit, on the last business day of each month.