Death and survivor benefits from VRS

Short answer: if you die while working and are vested, your spouse, minor child or parent may choose a monthly benefit or a lump sum of your member contribution account; other beneficiaries get the lump sum. After you retire, your payout option decides, and VRS group life insurance may also pay your beneficiary. See also Social Security, which changes the work-related benefit, and leaving teaching. Estimate the pension in the calculator.

If you die while working

Death in service, non-work-related: a vested member's spouse, minor child or parent (if a named beneficiary or by order of precedence) may take a lump sum of the member contribution account or a monthly benefit; other beneficiaries, or any beneficiary of a non-vested member, get a lump sum only. Plan 1 Handbook p. 41, Non-Work-Related Cause of Death

Monthly benefit uses AFC, total service, the member's age and the beneficiary's age; a member who dies younger than 55 (Plan 1) or 60 (Plan 2/Hybrid) is treated as that age and the beneficiary's age adjusted by the same difference. The actuarial appendix describes it as if the member retired, elected the 100% Survivor Option, then died. Plan 1 Handbook p. 41; Plan 2 Handbook p. 42; Actuarial Appendix p. 13, Teachers: Death Benefit

Work-related death (compensable under the Virginia Workers' Compensation Act): monthly benefit to spouse, minor child or parent of 33 1/3% of AFC if eligible for Social Security survivor benefits, otherwise 50% of AFC; supplements workers' compensation; plus the member contribution account to the named beneficiary. Plan 1 Handbook p. 42, Work-Related Monthly Benefit Calculation

Order of precedence (if no beneficiary is named): Spouse; then minor children (equal shares, ends when the last turns 18); then parents; then lump sum to adult children, descendants per stirpes, estate, next of kin. Plan 1 Handbook p. 42-43, Death-in-Service Order of Precedence

After you retire

Basic Benefit: beneficiary receives any balance left in the member contribution account. Survivor Option: the chosen percentage continues to the survivor. Plan 1 Handbook p. 16-17, Basic Benefit; Survivor Option See Payment options.

Retiree life insurance

Retiree basic group life: compensation at retirement rounded to the next highest thousand, then doubled (with 20+ years, based on highest compensation as a covered employee). Reduces 25% each January 1 starting January 1 following one calendar year after employment ends, until 25% of the value at retirement. Minimum $8,000 (established 2015, increased annually by the Plan 2 COLA) with 30+ years. Accidental death/dismemberment doubling ends at retirement. Plan 1 Handbook p. 59-60, Basic Group Life Insurance Coverage; The Value of Your Life Insurance (reduction timeline example)

From the handbooks

• If a vested member dies while working, a spouse, minor child or parent may choose a monthly benefit or a lump sum of the member contribution account. For non-vested members the beneficiary gets a lump sum.Plan 1 Handbook p. 41, Non-Work-Related Cause of Death
• For that monthly benefit, a member who dies before 55 (Plan 1) or 60 (Plan 2 and Hybrid) is treated as being that age.Plan 1 Handbook p. 41; Plan 2 Handbook p. 42
• Work-related death: the spouse, minor child or parent gets 33 1/3% of AFC if eligible for Social Security survivor benefits, or 50% if not.Plan 1 Handbook p. 42, Work-Related Monthly Benefit Calculation
• Retiree group life insurance starts at twice your pay (rounded up to the next thousand), then drops 25% each January 1 until it reaches 25%. Example: $49,780 pay gives $100,000, falling to $25,000 by January 1, 2031 for a July 1, 2027 retirement.Plan 1 Handbook p. 59-60, Basic Group Life Insurance Coverage

Questions