Beneficiary/Death Benefits

When you become a member of the retirement system, it's important that you name a survivor pension beneficiary, a refund beneficiary, or request that the default provisions of the law apply. You can do this in miAccount. Once you enter your information, you can view and change it at any time.

While you are actively employed, the default provision of the law automatically provides a lifetime monthly survivor benefit (if eligible) to your spouse, or if not married, equal payments to your unmarried children until they reach age 18.

Note: The Michigan Office of Retirement Services (ORS) must receive your beneficiary designation before you terminate employment; see If you die as a deferred member below. (The default provision does not apply to deferred members.)

Before giving ORS your beneficiary designation, be sure you have a good understanding of if, when, and to whom a benefit may be payable upon your death. Carefully read the following sections.

Some factors that should influence your decision about whether to name a beneficiary or use the default provisions of the law are: 

• What is your family composition?
• What is your marital status?
• What is your vesting status?
• Are you naming a survivor pension beneficiary or a refund beneficiary?
• Are you active, deferred, or retired?

If you die while an active member.

Nonduty death. If your death is not a result of an injury or illness incurred at work, it is called a nonduty death. A monthly pension may be payable to your survivor pension beneficiary if you were in the Member Investment Plan (MIP) with at least 10 years of service (YOS) or 5 years if you were at least age 60. Basic members must have at least 15 years of credited service if they are younger than age 60, or 10 years if they are at least age 60, for their survivors to be eligible for a survivor pension.

The nonduty death survivor benefit is payable beginning the month following your death. For MIP and Basic members who did not switch to the Defined Contribution (DC) Plan, it's calculated as if you retired the day before you died and elected the 100% survivor option. If you're a MIP DC Converted or Basic DC Converted member, your survivors would receive any remaining employee contributions you made. Any payout from your account balance for employer contributions you earned as a member of the DC Plan would be determined based on your YOS (50% vested at 2 years, 75% vested at 3 years, and 100% vested at 4 years). If you met age and service requirements, your survivors would receive a pension based on your YOS as of the date you switched to the DC Plan.

If you selected the premium subsidy benefit, health, dental, prescription drug, and vision insurance coverage is also available to beneficiaries receiving a survivor pension at the maximum subsidy allowed by law, currently set at 80%. If you selected the Personal Healthcare Fund, your beneficiaries are not eligible for subsidized health, prescription drug, dental, or vision insurances through the retirement system.

If you met vesting requirements at the time of your death, your beneficiaries would receive the Personal Healthcare Fund employer matching 2% contributions and related earnings in your 401(k) account, and your 2% contributions and related earnings in your 457 account.

If you do not designate your beneficiary with ORS, your spouse is automatically your survivor pension beneficiary. If you are not married, your unmarried minor children are automatically your beneficiaries until they reach age 18, marry, or are adopted.

If your spouse waives the pension benefit, you may designate any of the following eligible beneficiaries if they depend on you for at least 50% of their personal support: your child, your brother or sister, or your parent.

If you have no surviving spouse or unmarried children younger than age 18, no continuing monthly benefit will be payable unless ORS has your valid beneficiary designation on file and only as long as the survivor pension beneficiary you named remains dependent on you/the income provided by the pension.

If you die before retirement and no monthly survivor pension is payable, any personal contributions and interest in your account will be paid to your refund beneficiary in a lump sum. If you haven't named a beneficiary, your contributions may be distributed by probate court order.

Duty death. If you die from a work-related injury or illness incurred during your public school employment, it is considered a duty death. A monthly survivor pension may be payable, regardless of your age or YOS, if a workers' compensation benefit is awarded based on your work-related injury or illness.

The duty death survivor benefit is payable beginning the month following your death and is calculated as if you retired the day before you died and elected the 100% survivor option. ORS will use no fewer than 10 YOS in the pension calculation, even if you have less service credit at the time of death. Health, dental, prescription drug, and vision insurance coverage is also available to beneficiaries receiving a survivor pension.

In addition, if you're a MIP DC Converted or Basic DC Converted member, your survivors would receive any remaining employee contributions you made. Any payout from your account balance for employer contributions you earned as a member of the DC Plan would be determined based on your YOS (50% vested at 2 years, 75% vested at 3 years, and 100% vested at 4 years). If you met age and service requirements, your survivors would receive a pension based on your YOS as of the date you switched to the DC Plan.

If your death is duty related, a monthly survivor pension may be payable to your named beneficiary, as long as they meet eligibility requirements, whether you were vested or not. If a valid beneficiary nomination is not on file, the default provision allows duty-related survivor benefits to your spouse, or if not married, to your children until they reach age 18, are adopted, or marry. If you are not survived by a spouse or eligible children, your totally and permanently disabled parent who depends on you for more than 50% of their support may be eligible for the duty-related survivor pension.

Health, dental, prescription drug, and vision insurance coverage is also available to beneficiaries receiving a survivor pension. If you chose the premium subsidy benefit, your beneficiaries will be eligible for the maximum insurance subsidy benefit allowed by law, currently set at 80%. If you chose the Personal Healthcare Fund, any employer matching contributions and related earnings in your account will be forfeited and the state will pay the maximum subsidy allowed by law.

If you die before retirement and no monthly survivor pension is payable, any personal contributions and interest in your account will be paid to your refund beneficiary in a lump sum. If you haven't named a beneficiary, your contributions may be distributed by probate court order.

If you die as a deferred member.

If you die while your retirement is in deferred status (that is, you left public school employment after vesting but before you're old enough to draw your pension), a monthly survivor pension will be payable to your eligible beneficiary provided (1) you have at least 10 YOS in the MIP or 15 YOS in the Basic Plan; and (2) you designated your beneficiary with ORS before you terminated employment.

If you designate a beneficiary with ORS before you terminate employment, you can change your beneficiary while in deferred status. If the nomination you filed with ORS specified the default provision, you must resubmit your nomination to name an eligible person as your beneficiary because the default provision will not apply while you are deferred.

The monthly survivor pension becomes payable beginning the month you would have otherwise become eligible to receive your pension; it is paid as if you had chosen the 100% survivor option.

If you die before retirement and no monthly survivor pension is payable, any pension contributions and interest in your account will be paid to your refund beneficiary in a lump sum. If you haven't named a beneficiary, your contributions may be distributed by probate court order.

If you die after leaving employment and before being vested.

If you die after leaving public school employment and before you have sufficient service to be vested in the Defined Benefit (DB) Plan, no survivor pension is payable. Upon notification by your survivor, we will return any DB pension contributions and accumulated interest to your refund beneficiary or your estate. If you're a MIP DC Converted or Basic DC Converted member, your survivor should also contact Voya Financial at 800-748-6128 for information on your State of Michigan 401(k) and 457 Plans accounts.

Before you leave your job, designate who will receive your contributions. If no beneficiary is on file, your contributions and accumulated interest may be distributed by probate court order.

If you die after you retire. 

A monthly pension is payable only to the person you designated as your survivor pension beneficiary. Ordinarily, this person is named when applying for retirement. However, if you marry after your pension begins, you may be able to name your new spouse as a pension beneficiary under certain conditions.