Pension Payment Options
Normal Forms of Payment
If You Are Married and Have an Eligible Spouse at Retirement
50% Joint and Survivor Option
You will automatically receive a 50% joint and survivor benefit, which entitles you to a monthly benefit for your lifetime.
After your death, your eligible spouse will receive a monthly benefit equal to 50% of your pension at the time of your death. This benefit is payable to your eligible spouse for his or her lifetime. However, if your eligible spouse predeceases you, no survivor benefit will be paid even if you remarry after retirement.
CPF subsidizes the full cost of the 50% survivor benefit, which means that there is no reduction to your own pension to cover the cost of the 50% survivor benefit to your eligible spouse.
Important note: A spouse’s eligibility for benefits varies considerably depending on factors such as date of marriage, survivor option chosen at retirement, date of death, date of divorce, status of paid Assessments, and other individual circumstances. Please make sure to report any change in your marital status to our Client Services group when the change happens.
If You Are Single or Do Not Have an Eligible Spouse at Retirement
You will automatically receive a single life option, called the zero option, which entitles you to an enhanced monthly benefit for the rest of your life. All payments end at your death, and no further pension benefits will be paid.
Because there is no 50% survivor benefit payable following your death (as there would be if you were married to an eligible spouse), CPF will increase your benefit by the actuarial value of a 50% survivor benefit.
The zero option is meant to provide equitable benefits for clergy who are not married to an eligible spouse when they retire.
Normal Forms of Payment
Optional Forms of Payments
If you do not believe that your normal form of payment is best for your personal situation, you may choose an optional form of payment (as described below) at the time you file a retirement application.
If you are married to an eligible spouse, you may choose:
- The zero option
- A 15-year certain and life option
- A 75% or 100% joint and survivor option
If you are not married to an eligible spouse, you may choose:
- A 15-year certain and life option
- A 50%, 75% or 100% joint and survivor option
Benefits under each survivor option are determined using actuarial tables and depend on your age and the age of your eligible spouse or named survivor beneficiary. Our Client Services group can provide details, including the costs of the various survivor options, upon request.
Important note: You may not change the form of payment or your beneficiary designation after your retirement date under any circumstances. In addition, if your beneficiary predeceases you after you retire, you cannot name a new beneficiary as a replacement. In this case, no survivor benefit is payable, even if you later remarry.
Please note: If you have an eligible spouse, you must have your spouse’s written, notarized consent to choose the zero option or 15-year certain and life option and/or to name someone other than your spouse as your beneficiary.
This is the normal form of payment if you are single or if your spouse is not an eligible spouse. If you are married to an eligible spouse, you may only choose this form of payment with your spouse’s written, notarized consent.
With the zero option, you will receive an enhanced monthly pension benefit for your lifetime. However, following your death, no survivor benefit will be paid.
If you are married to an eligible spouse, you may wish to consider this payment option if:
- You have sufficient life insurance or other assets to provide for your eligible spouse; and/or
- Your eligible spouse has adequate retirement benefits of his or her own; and/or
- You believe that your eligible spouse is more likely to predecease you by reason of age or infirmity.
15-Year Certain and Life Option
Under this option, you will receive a monthly pension benefit for your lifetime. If you die after receiving payments for 15 years, there will be no further benefits payable after your death. However, if you die before receiving payments for 15 years, then your eligible spouse or designated beneficiary will receive a monthly benefit for the remainder of the 15-year period. If your eligible spouse or beneficiary dies before the end of the 15-year period, the balance of any remaining payments will be paid to the estate of whoever is the last to survive.
By electing this option, the amount of your monthly pension will be increased or decreased as follows:
- If you are married to an eligible spouse, it will be increased; or
- If you are single, or do not have an eligible spouse, it will be decreased.
You can choose this payment option if you:
- Are single or your spouse is not an eligible spouse and you want to designate another person as your beneficiary; or
- Are married to an eligible spouse and your spouse provides written, notarized consent.
50%, 75%, or 100% Joint and Survivor Option
This payment option provides an actuarially reduced benefit over your lifetime.* Benefits are reduced because they will be paid beyond your lifetime. In the event of your death, your beneficiary will receive a benefit equal to the percentage that you elected for his or her lifetime (that is, 50%, 75%, or 100%).
If your beneficiary dies before you, you may not name a new or replacement beneficiary. In this case, no benefits will be payable after your death, even if you later remarry.
You can choose this payment option if you are:
- Single or do not have an eligible spouse and want to designate any person as your beneficiary; or
- Married to an eligible spouse and want to choose the 75% or 100% joint and survivor option for your spouse instead of the 50% joint and survivor option, which is automatically the normal form of payment. Your spouse’s written, notarized consent is not needed if you choose any of these options.
* If you are married to an eligible spouse and choose to receive the normal form of payment (50% J&S), the monthly pension benefit you receive is not reduced because CPF subsidizes the full cost of the 50% survivor’s benefit.
Optional Forms of Payment
Lump Sum Payment of Small Benefits
If the actuarial equivalent value (that is, present value) of your pension is $20,000 or less as of the date that you plan to retire, you will not receive your pension in the normal form of payment (or an optional form of payment). Instead, your pension will be paid to you in a single lump sum payment. This means that you will not receive monthly pension payments for your lifetime from the Clergy Pension Plan.
You may take the lump sum payment as a cash distribution or roll it over to an eligible retirement plan or individual retirement account, subject to Internal Revenue Service requirements.
When calculating the present value of your pension, CPF will consider the lifetime value of monthly pension payments, your annual Christmas benefit, and the value of the fully subsidized 50% survivor benefit or the zero option, whichever normal form of payment applies to you. Cost-of-living increases, which are discretionary, will not be included in the present value calculation.
If you are eligible, you will continue to receive the resettlement benefit, retiree life insurance benefit, child benefit, access to a Medicare Supplement Health Plan and/or dental plan offered through The Episcopal Church Medical Trust, and the Medicare Supplement Health Plan Subsidy.