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PBGC offers several benefit form options to any participant who receives his or her first benefit payment on or after May 1, 2002. The following are answers to questions about benefit choices currently available to participants who are not yet retired.
Q: What benefit choices are available?
A: You may elect to receive your benefits in one of the following ways:
If you are married when your benefit payments begin, your spouse must provide written consent for you to elect any form of benefit other than the automatic form your plan would pay to a married participant.
Q: When do I choose the form of annuity I want?
A: You select the form of annuity you want at the time you file your application to begin receiving your pension benefits. PBGC must receive your application no more than 90 days before the date you requested that your benefits begin. You may change your selection by filing a new application before the date of your first payment. After the date of your first payment, you cannot change your selection.
Q: Are these benefit payment options available in all the pension plans PBGC oversees?
A: Yes. These options are available for all participants who apply to PBGC to start receiving their benefits on or after May 1, 2002.
Q: If I am married, may I name someone other than my spouse to be my beneficiary?
A: If you are married, you may name a person who is not your spouse as your beneficiary; however, to do so, you will need the written consent of your spouse on your PBGC application for benefits.
Q: If I am not married, may I still name a beneficiary to receive survivor benefits after my death?
A: If you are not married, you may name a beneficiary to receive survivor benefits under any optional joint-and-survivor or certain-and-continuous annuity form.
Q: Are there any limitations on who may be named as my beneficiary?
A: In the case of a joint-and-survivor annuity, you may designate only one person. For certain-and-continuous annuities, your beneficiary may be one or more persons, an estate, a trust, or an organization.
Q: Can I change my beneficiary after I start receiving my benefits?
A: If you choose a joint-and-survivor annuity, you cannot change your beneficiary after your benefit starts. If you choose a certain-and-continuous annuity, you may change your designated beneficiary at any time.
Q: What happens if my beneficiary dies before me?
A: The answer depends on the benefit form you elected:
Q: If my beneficiary dies before me, will my monthly benefit increase?
A: Your monthly benefit will stay the same unless you elect the joint-and-50% survivor "pop-up" annuity. With the joint-and-50% survivor pop-up annuity, your monthly benefit will "pop-up" to the straight-life annuity amount if your beneficiary dies before you.
Q: What happens if I die before I retire?
A: If your pension plan terminated on or after August 23, 1984, and you are married at the time of your death, PBGC generally will pay your spouse a benefit. We will determine what your benefit would have been at your death (or your earliest retirement age, if later) and pay your spouse a benefit as though you had retired with a joint-and-survivor annuity just before you died. If you are not married when you die, or if your plan terminated before August 23, 1984, generally there will be no benefit payable to a beneficiary.
Q: What should I consider when choosing my annuity benefit form?
A: This question is complex; this could be one of the most important financial decisions you will ever make. Your decision affects the amount of your monthly benefit and how much (if anything) your beneficiary will receive after your death. The best option for you depends on your age, health, and other financial resources, as well as the age, health, and financial needs of anyone for whom you wish to provide a benefit. If you are married, you should discuss this choice with your spouse. You may also want to discuss this choice with other family members or friends or, possibly, a financial advisor.
Q: How do I find out what my benefit amount would be under the optional forms of annuity?
A: Call PBGC's Customer Service Center toll-free at 1-800-400-7242 and request a benefit application package. (For TTY/TDD users, call the Federal Relay Service toll-free at 1-800-877-8339 and ask to be connected to 1-800-400-7242.) PBGC will send you the application and the exact benefit calculations to show the amount of your benefit under all of your annuity form options. If you are married, the calculations will also show the amount of your spouse's benefit.