- If you die before retiring with five or more years of service, your beneficiary can take your contributions plus interest or a lifetime benefit figured as if you had retired under Option B. They can start it right away or defer it up to your 60th birthday. Deferring can mean a smaller age cut.Member Handbook 2025, p. 20, Death Prior to Retirement
- Handbook example: a Tier 1 member dies at 42 with 15 years. The age cut taken right away would be 105.6%, so nothing is payable. If the survivor waits until the member's 50th birthday, the cut is 48%.Member Handbook 2025, p. 20
- After retirement, Option A pays any contributions not yet paid out to your beneficiary or estate. Options B and C continue 100% or 50% to your beneficiary for life.Member Handbook 2025, pp. 10, 18
Before you retire
After five years of earned service, the beneficiary named on the Pre-Retirement Beneficiary Designation form may take a lump sum (contributions plus interest) or a lifetime benefit as if the member had retired under Option B on the first of the month after death. More than one beneficiary with no spouse, or a trust, gets a lump sum; if several are named including a spouse, the spouse is the Option B beneficiary. The beneficiary may start the benefit the month after death or defer it up to the member's 60th birthday. The age-related reduction applies to survivor benefits, so deferring can raise the benefit. Under five years: contributions plus interest. Member Handbook 2025, p. 20, Death Prior to Retirement
The handbook's example
A Tier 1 member dies at 42 with 15 years. The benefit before any cut is 15 × 2.35% = 35.25% of final average salary (the web page rounds it to 35%). The survivor's benefit is cut for the member's age when it starts:
| Survivor benefit | Handbook cut | Our engine |
|---|---|---|
| Starts right away (age 42) | 105.6% | 100%over 100%: nothing payable |
| Deferred to the member's 50th birthday | 48% | 48% |
| Deferred to the member's 55th birthday | 12% | 12% |
| Deferred to the member's 60th birthday | 0% | 0% |
Member hired before July 1, 2010 died at 42 with 15 years: (5 years x 2.4%) + (13 years x 7.2%) = 105.6%, so no payment if taken now; deferring to the member's 50th birthday: 12% + 36% = 48%. Member Handbook 2025, p. 20, Death Prior to Retirement (example); NMERB web page Plan Features, Options Before Retirement (also 12% at 55, none at 60; 'initial benefit of 35% of FAS')
The cut works like the early retirement cut, on the usual formula amount. So waiting can turn nothing into a real monthly benefit: by the member's 60th birthday there's no cut at all.
The handbook's survivor example is for a Tier 1 member. It doesn't say which age cuts apply to the survivor benefit of a Tier 2, 3 or 4 member. We use that member's own tier cuts.
What would settle it: An NMERB survivor benefit estimate for a Tier 2, 3 or 4 member who died before retirement.
After you retire
Option A: the balance of unpaid contributions goes to the beneficiary or estate. Options B/C: the survivor's monthly benefit continues. Benefits are paid through the month of death. Survivors of retirees may also qualify for a one-time lump-sum death benefit based on years of service (amount not published in these sources). Member Handbook 2025, p. 10, Refunds and Rollovers; p. 18, Option A; NMERB web page Death of a Member / Beneficiary
- Option A: Straight Life Benefit: no monthly survivor benefit. Member Handbook 2025, p. 18, Option A
- Option B: Joint 100% Survivor Benefit: 100% of your benefit continues to your beneficiary for life. Member Handbook 2025, p. 18, Option B
- Option C: Joint 50% Survivor Benefit: 50% of your benefit continues to your beneficiary for life. Member Handbook 2025, p. 18, Option C
NMERB's death page mentions a one-time lump sum for survivors of retirees, based on years of service, but gives no amount. It may be NMRHCA life insurance rather than an NMERB benefit.
What would settle it: NMERB or NMRHCA schedule of the retiree death benefit.
Compare the options on payment options, or see the Option A amount for your own numbers in the calculator.
Questions
What does my family get if I die before I retire?
After five years of earned service, the beneficiary named on the Pre-Retirement Beneficiary Designation form may take a lump sum (contributions plus interest) or a lifetime benefit as if the member had retired under Option B on the first of the month after death. More than one beneficiary with no spouse, or a trust, gets a lump sum; if several are named including a spouse, the spouse is the Option B beneficiary. The beneficiary may start the benefit the month after death or defer it up to the member's 60th birthday. The age-related reduction applies to survivor benefits, so deferring can raise the benefit. Under five years: contributions plus interest.
What happens to my pension when I die after retiring?
Option A: the balance of unpaid contributions goes to the beneficiary or estate. Options B/C: the survivor's monthly benefit continues. Benefits are paid through the month of death. Survivors of retirees may also qualify for a one-time lump-sum death benefit based on years of service (amount not published in these sources).
Source: NMERB Member Handbook, 2025 edition, pp. 10, 18, 19-20, 20. Also: NMERB web pages 'Plan Features', 'Death of a Member / Beneficiary'; 2.82.5.13- NMAC; 'initial benefit of 35% of FAS'); NMSA 1978 § 22-11-29. Last reviewed .