Pension Payout Options Basics
Because everyone’s needs are different, many of WRS' pension plans offer different payout options for you to select from when you take your retirement benefit.
Each payout option is a different variation of an annuity. An annuity is a payment method that ensures lifetime retirement income for you and, in some cases your beneficiary. Each option pays one person at a time, first the retiree and upon the retiree’s passing the benefit transfers to a survivor beneficiary depending on the option selected.
The monthly benefit amount will vary depending on the option you select. You want to make sure you select the option that will provide what is needed for your circumstances. Some options allow you to change your beneficiary after you retire, some do not.
You will choose your payout option when you apply for retirement. Take the time to carefully weigh the choices. Once you choose an option and receive your first monthly check, the chosen option cannot be changed.
Pension Payout Options for the Public Employee Pension Plan
Self-Funded Cost of Living Adjustments
Inflation can seriously erode purchasing power over a long period in retirement. In order to offset the effects of inflation, the Public Employee Pension Plan includes the option to elect any of the payout options and combine it with a self-funded, cost-of-living adjustment (COLA). This feature provides a guaranteed annual increase each July 1, following the two-year anniversary of your retirement, in exchange for a reduction in the initial benefit amount (with zero percent COLA).
It will take a number of years before your benefit payment exceeds the amount of your original benefit. However, you receive a predictable ongoing increase to your pension income of either 1 percent, 2 percent or 3 percent and increases are compounded. It is expected at some point the increases will surpass the amount of your initial benefit.