You can choose among pension payment options to meet your personal retirement needs.
Payment options are grouped into “normal” and “optional” forms. Think about the normal form as the default based on your marital status when you leave or retire.
If you are single when you leave or retire, you can choose any form of payment. If you are married and want to choose an optional form of payment other than one of the Joint and Survivor options, your spouse must agree in writing.
After reviewing your payment options, be sure to go online and estimate what your monthly payments will be under each option. Consider your decision carefully because you cannot change the form of payment after payments begin.
Normal Form of Payment
Single Life Annuity
If you are single when benefits begin, the normal form of payment is a single life annuity that provides monthly payments to you for your lifetime. When you die, no further benefits are payable to anyone else.
Qualified Joint and Survivor Annuity
If you are married when your benefits begin, the normal form of payment is a qualified Joint and Survivor annuity. This form pays you a reduced benefit during your lifetime so that when you die, your spouse, if he or she survives you, will receive 50 percent of the benefit you were receiving for the rest of his or her life.
Optional Forms of Payment
You may select one of the following optional forms of payment instead of your normal form. However, if you are married when you leave or retire, your spouse must consent to your election in writing unless you elect one of the Joint and Survivor options.
Single Life Annuity
This is the same as the normal form of payment for a single person. It provides monthly benefits during your lifetime only, with no benefits payable to anyone else after your death.
66⅔%, 75% or 100% Joint and Survivor Options
These options provide reduced monthly benefits during your lifetime so that after your death your designated beneficiary receives a percentage of that reduced monthly benefit for the rest of his or her life. The larger the percentage for your survivor, the less you will receive during your lifetime.
Certain and Continuous Annuity Option (Five or 10 Years)
This payment option provides reduced monthly benefits during your lifetime. If you die before receiving all of your payments during the guaranteed period (five or 10 years), your beneficiary will be paid the same amount you were receiving for the remainder of the guaranteed period. After all the guaranteed payments are made, payments to the beneficiary will stop. The longer the guaranteed period, the greater the reduction in your benefit.
Hess provides tools and resources you can use to plan ahead.