Guaranteed Payment Options
Now you have another option to designate your benefit payments to your estate.
Current Retirement Options 2 and 3
The monthly benefit resulting from the transfer is generally paid only until you die. Retirement Option 2 or Option 3 are paid after your death or the death of your named survivor. Therefore, if you and your survivor were to die shortly after you begin receiving benefit payments, your total payments will be far less than the amount you transferred and your remaining heirs will receive nothing. Keep in mind that the transfer provision is intended to cover your recurring expenses and, if elected, the expenses of one survivor.
Any assets that you wish to leave to your heirs should NOT be transferred from the NC 401(k) and NC 457 plans to the Retirement System. As discussed previously under Balancing Income and Expenses, money that you wish to leave to your heirs should be provided with one-time sources of funds, such as an NC 401(k), NC 457 or NC 403(b) account balance.
Because some members will be concerned about the possibility of receiving total payments that are far less than the initial transfer, the Board of Trustees has specified that all benefits will continue for at least three years. If both you and your survivor die within that time, the remaining payments will be made to your estate.
New Guaranteed Payment Option
If you are especially concerned about the possibility of receiving total payments that are far less than the initial transfer, you can select an alternative payment option that will guarantee that the sum of the monthly payments will total at least the initial transfer amount (without interest after the date of transfer). Any remaining payments due after your death and the death of your beneficiary will be paid to your estate. However, under this option, your monthly payments will be reduced to compensate for the value of this guarantee. Also, keep in mind that this may not be a good way to leave assets to your heirs because if you do live long enough to receive payments equaling the initial transfer, no additional amount will be paid to your estate.
Assets that you wish to leave to your heirs should not be transferred to the Retirement System.