How to Choose a Benefit Payout Option

May 2024
A smiling older man holding a sheet of paper next to text saying choosing your benefit payout option.

When you apply for retirement, you will decide how to receive your monthly defined benefit by choosing a benefit payout option. This decision is irrevocable in most cases, so it’s important to understand the four options:

  • Basic Benefit. A lifetime monthly benefit based on your age, total years of service and average final compensation. This benefit does not continue to a survivor after your death.
  • Survivor Option. You receive a lower monthly benefit during your lifetime so that your survivor can receive a monthly benefit after your death. You can name more than one survivor and choose a percentage of your benefit to go to them. Your benefit amount is then based on that percentage, your age and the age of your survivor at retirement.

You can change the Survivor Option once during your lifetime under certain conditions such as death of your survivor or divorce.

  • Partial Lump-Sum Option Payment (PLOP). If you work at least one year beyond the date you are eligible for an unreduced benefit, you may choose to receive a one-time PLOP. You may elect up to three times the amount of your annual Basic Benefit. The amount depends on how long you work beyond your eligibility for an unreduced retirement.

    The PLOP option reduces your monthly benefit. You can choose this option with the Basic Benefit or Survivor Option.
  • Advance Pension Option. You opt to temporarily increase your monthly retirement benefit. The temporary increase begins at retirement and continues until an age you choose, between age 62 and your normal retirement age under Social Security. At the age you select, your retirement benefit permanently reduces.

Dive Deeper With VRS Resources

Take a closer look at your benefit payout options and decide which one will suit your needs using custom tools in myVRS.

Log in to estimate your retirement benefit using the myVRS Benefit Estimator. You can calculate several retirement scenarios based on different benefit payout options. Plug your results into the Retirement Planner to estimate future income needs.

FYI: VRS Director Patricia S. Bishop gives an overview of the myVRS Benefit Estimator and Retirement Planner tools in February’s Member Benefit Tips.

Read the section on benefit payout options in your VRS Handbook for Members for example benefit amounts, calculation breakdowns and other details.

Schedule a virtual or in-person appointment with a VRS member counselor to discuss your options, or view or register for the Benefit Payout Options webinar for Plan 1 and Plan 2 members.