Guaranteed Payment Options

The monthly benefit resulting from the transfer is generally paid only until you die. If you select Option 2, 3, 6-2 or 6-3, it is paid until the later of your death or the death of your named survivor. Thus, if you and your survivor beneficiary were to die shortly after commencing payment, your total payments will be far less than the amount you transferred and your remaining heirs will receive nothing. The income you receive is intended to cover your recurring expenses, and, if elected, one survivor's expenses. Any assets you wish to leave to your other heirs should NOT be transferred from the NC 401(k) and 457 plans to the Retirement System. As discussed above under Balancing Income and Expenses, money you wish to leave to your heirs should come from other sources of funds, such as a 401(k) or 457 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 3 years. If both you and your survivor beneficiary die within that time, the remaining payments will be made to your guaranteed refund beneficiary or to your estate.

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 option that guarantees that you or your heirs will receive 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 survivor beneficiary will be paid to your guaranteed refund beneficiaries or 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 is not 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. Once again, assets that you wish to leave to your heirs should not be transferred to the Retirement System.