At the time you retire, you will make an irrevocable election of a retirement option. The various options determine the extent of benefits distributed during your retirement and upon your death. Because your option choice is irrevocable, it is important to consider your selection carefully. The following pages summarize the options established in the County Employees’ Retirement Law of 1937 (CERL).
Unmodified Option
The unmodified allowance is the highest allowance possible. This option provides, upon your death, that your qualified surviving spouse/domestic partner will receive a lifetime benefit equal to 60% of the benefit you received during retirement.
To qualify, you and your spouse/domestic partner must be legally married/registered as domestic partners with the State of California, for at least one year prior to your retirement date and continuously until the member’s death. If there is no qualified spouse/domestic partner and there are minor children, there is a 60% continuance available to the minor children as long as they remain eligible.
Eligible minor children are under age 18, or under age 22 if in school full time and unmarried. If, at the time of your death, there is no one eligible for a continuance, a lump-sum payment of remaining contributions, if any, becomes payable to your beneficiaries.
Option 1
This option does not provide a continuance. Upon your death, a lump sum payment of any remaining member contributions becomes payable to your beneficiary. Each month a portion of your benefit is deducted from your contributions until the balance of your contributions is zero. You will continue to receive your benefit, but there would no longer be a benefit payable to your beneficiary. If the named beneficiary dies before you, a new beneficiary may be designated.
Option 2
This option provides, upon your death, a lifetime benefit to your sole beneficiary equal to 100% of the benefit you received during retirement. In order to provide this continuance, your benefit is reduced during retirement based on your life expectancy and the life expectancy of your beneficiary. Should your beneficiary pre-decease you, you will continue to receive the same reduced amount. You will not be allowed to designate a new beneficiary.
Option 3
This option is available when your beneficiary is not a qualified spouse/domestic partner. This Option provides upon death, a lifetime benefit to your sole beneficiary equal to 50% of the benefit you received during retirement. In order to provide this continuance, your benefit is reduced during retirement based on your life expectancy and the life expectancy of your beneficiary.
Should your beneficiary pre-decease you, you will continue to receive the same reduced amount. You will not be allowed to designate a new beneficiary.
Option 4
An Option 4 is popular among members who are divorced and must leave an ex spouse a benefit upon their death. This option allows for multiple beneficiaries to be named and is calculated by MercedCERA’s actuary. The member takes a reduced amount during their lifetime and the member’s birthdate and beneficiaries birthdates are also taken into account for these calculations. Member’s must pay MercedCERA’s hourly rate for their actuary for these calculations.
Age 62 Modified Allowance
Also, known as the Social Security Leveling Option. This option gives you a larger benefit (based upon your Social Security estimate of benefits receivable at age 62) from the age you retire to age 62. However, at age 62, your MercedCERA benefit will be reduced by the amount shown on the Social Security estimate you provided at the time of your retirement. This option can give you a more level payment for your life consisting of a combination of your Social Security benefit and MercedCERA retirement.
This option is available only if you retire before age 62. If you would like an estimate for the Age 62 Modified Allowance, you must provide MercedCERA with information regarding your future Social Security income. Please contact MercedCERA at 209-726-2724 for more information.
