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Old 11-12-2013, 10:08 PM
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JasonScandopolous JasonScandopolous is offline
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Default Question about public pensions, surviving spouses

I am not a pension actuary, but someone asked me this question and I am now curious. I don't have the Plan with me but hopefully somebody can speak in generalities or has worked with this Plan before.

An employee of the new york public health system (hospital in brooklyn), who was age 63 when he died. Death occurred prior to retirement. The surviving spouse was vague on exactly what she did receive from her husband's pension plan, but did not believe or was told that she was not eligible to receive an ongoing pension benefit. In other words, there was some sort of lump sum, which may or may not have been a provision of the pension plan (e.g. may have been life ins; the details I got were vague, memory rusty).

I tried googling about this, and it sounds like this sort of thing wouldn't be possible in a private pension plan (unless the wife had agreed in writing to waive spousal pension benefits). Are there public plans that work like this? Has anybody worked with any NYC or NY public plans that may be exactly this plan or similar to it that can comment? Alternatively, would the Plan Document be available online anywhere (I can't find it via google) -- not sure if the hospital system has their own Plan or if there's a general public plan.
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Old 11-12-2013, 10:17 PM
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This isn't the "Plan" but I think this is the right system and is the relevant information: http://www.nyc.gov/html/nycers/pdf/survivor.pdf

Assuming that this is the right plan... what is "Your Members Contribution Accumulation Fund", if it's possible to tell without any details?
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Old 11-14-2013, 12:39 AM
ACRepairMan ACRepairMan is offline
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The document you posted appears to be for the life insurance benefit the woman did receive. The separate issue of an ongoing pension benefit is a short story...

I believe ERISA requires employers make a pre-retirement survivor benefit available, however allows them to charge the participant for this benefit (as a reduction in benefit upon commencement). Participants can waive the right to this benefit after turning age 35 (or upon marriage if later) to avoid this reduction in benefit.

My guess is at some point they waived the benefit. Otherwise rules could be different for government or multi employer plans, which I am not familiar with.
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Old 11-14-2013, 10:22 AM
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Public pension plans are exempt from most of ERISA, including the preretirement surviving spouse coverage provisions. I'm pretty sure they don't even have to provide the pre-ERISA minimum spousal benefit (applicable to private sector plans before ERISA). Spouses beware.
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Old 11-14-2013, 05:32 PM
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Originally Posted by ACRepairMan View Post
The document you posted appears to be for the life insurance benefit the woman did receive. The separate issue of an ongoing pension benefit is a short story...

I believe ERISA requires employers make a pre-retirement survivor benefit available, however allows them to charge the participant for this benefit (as a reduction in benefit upon commencement). Participants can waive the right to this benefit after turning age 35 (or upon marriage if later) to avoid this reduction in benefit.

My guess is at some point they waived the benefit. Otherwise rules could be different for government or multi employer plans, which I am not familiar with.
likely isn't an ERISA plan
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Old 11-15-2013, 09:58 AM
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Originally Posted by JasonScandopolous View Post
This isn't the "Plan" but I think this is the right system and is the relevant information: http://www.nyc.gov/html/nycers/pdf/survivor.pdf

Assuming that this is the right plan... what is "Your Members Contribution Accumulation Fund", if it's possible to tell without any details?
Jujst to address your last question. A pension plan may require that the employee make contributions to the pension plan. These employee contributions, if any, could be what is comprising "Your Members Contribution Accumulation Fund", and would be returned upon death prior to retirement.
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Old 11-15-2013, 11:35 AM
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Originally Posted by Dan Moore View Post
Public pension plans are exempt from most of ERISA, including the preretirement surviving spouse coverage provisions. I'm pretty sure they don't even have to provide the pre-ERISA minimum spousal benefit (applicable to private sector plans before ERISA). Spouses beware.
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Jujst to address your last question. A pension plan may require that the employee make contributions to the pension plan. These employee contributions, if any, could be what is comprising "Your Members Contribution Accumulation Fund", and would be returned upon death prior to retirement.
These.

All of the public plans I work on have some sort of pre-retirement spouse's benefit. HOWEVER, many also have employee contributions and will offer a refund of contributions IN LIEU OF the spouse's benefit.

BUT! They are NOT required to inform the spouse about the value of the spouse's pension relative to the return of contributions. Spouse's (still grieving) will ASSUME that the two are comparable, a lump sum is attractive, and spouses will often opt for the ROC, not knowing they are giving up 10's of 1000's, possibly 100k+ in pension benefits.

And the plan is not required by law to tell them as they would be if they were an ERISA plan. It's a great little money-saver for the plan: Shhhh!!! If we don't explain to them what they are entitled to, they will forfeit it themselves!!

Kinda sad. This almost happened to a friend of mine whose husband was in our state's pension plan. I told her, "Don't sign ANYTHING until I look at it first!" Had she taken the ROC, she would have forfeited over $70,000 in benefits.
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