Will my beneficiary get survivor payments? - Hourly Video Transcript
Generally, the form of benefit you chose at retirement before PBGC became trustee will not change.
The normal form of benefit for a married participant in the Hourly plan is a Joint and 65% Survivor Annuity with a "pop-up". What does this mean?
Your Joint and 65% Survivor Annuity pays you a monthly amount for life, and then, after your death, pays your named beneficiary, usually a spouse, a monthly payment of 65% of the amount you were receiving.
The survivor benefit is not free; it provides security to your beneficiary by reducing the payment to you, the retiree during your lifetime. By contrast, a Straight Life Annuity pays the retiree more every month, but does not pay anything to a beneficiary.
The "pop-up" feature of your Joint and 65% Survivor Annuity means that if your beneficiary dies before you, the amount you are receiving "pops-up" to the higher Straight Life amount.
As you may have guessed, the normal form of benefit for an unmarried participant in the hourly plan is a Straight Life Annuity.
However, your plan provided for certain changes after retirement, some of which PBGC cannot allow going forward.
If you were married when you retired and chose the normal form of benefit for a married participant, a Joint and 65% Survivor Annuity, the plan would have let you change your benefit to a Straight Life Annuity if you got divorced and your former spouse agreed to the change.
If you were remarried, you would have been able to change your form of benefit back to a Joint and 65% Survivor Annuity. Now that the plan has ended, PBGC will not allow you to make such a change. However, PBGC will honor such a change if you made it before the plan ended.
If you were single when you retired and you chose the Straight Life Annuity, the plan would have permitted you to change your form of benefit to a Joint and 65% Survivor Annuity if you later married.
Now that the plan has ended PBGC will not allow you to make this change. But if you already changed your benefit before the plan ended, PBGC will honor the change.